It raised Rs 70 crore from its maiden real estate fund, PropShare Real Estate Fund I (PREF I), which was introduced in July 2021
Two years after it launched its maiden real estate fund called PropShare Real Estate Fund I (PREF I), Property Share is planning to roll out PREF II shortly. The tech-enabled commercial property listing platform hopes to raise Rs 1,000 crore through this fund.
CEO and co-founder Kunal Moktan, revealed this to Outlook Start-Up, saying that this fund will look at opportunities in commercial real estate.
The company will concentrate on specialised real estate assets, like warehousing and industrial units, which are more resilient to economic headwinds. Moktan is confident about succeeding in this endeavour because of Property Share’s track record.
“A third of our investors invest back into the platform, which is a testimony about our ability to deliver,” he states, adding, “This is an industry where one sells an asset after three to four years. If you continuously sell at a loss, no investor will return to you.”
PREF I was set up as an Alternate Investment Fund (AIF Category II) in 2021 and was registered with the stock market regulator, the Securities and Exchange Board of India (SEBI).
Aiming to capitalise on the commercial property boom in India, the fund raised Rs 70 crore as it offered investors—who largely comprise institutional investors, HNIs, family offices, as well as NRI investors—a 7 per cent to 9 per cent annual rental yield (pre-tax) with an investment horizon spanning three to five years for a property. The target internal rate of return (IRR) was set at 17 per cent to 20 per cent, with a focus on rental yield and capital appreciation at the exit.
In 2022, Property Share entered the UK market, investing over Rs 200 crore into three warehouses there. “A few weeks ago, we launched a public markets product where we advise our investors about investing in globally listed real estate investment trusts in the US and Europe, UK, Singapore, etc,” Moktan adds. “We are now working towards getting a full-fledged license from the Financial Conduct Authority, the UK’s financial regulatory body, which will help us market these opportunities to residents in that country.”
Meeting the needs of investors in the UK, US and Singapore will be a big part of Property Share’s future business plans, as the company wants a larger play in the alternative investment space, which includes investing in global real estate assets and real estate investment trusts (REITs).
Globally, REITs are predominantly yielding products offering fixed investment returns in commercial real estate assets with robust governance and professional management. In the US alone, it is a $2.5 trillion dollars asset class.
Property Share’s assets under management (AUM) stand at around Rs 1,400 crore currently, and the company claimed that its y-o-y growth rate has averaged 90 per cent over the past couple of years. Moktan expects this pace to increase as it expands its user base and enters bigger property deals.
Since the company is well capitalised for now, Property Share is unlikely to consider another funding round. Moktan states that this is because it has adopted a conservative business approach without going overboard with hiring people or burning marketing dollars.
“As co-founders, Hashim Khan and I still own more than 50 per cent of the company after the Series B funding round and believe in playing safe, which has held us in good stead over the years,” he sums up.
In July 2023, Property Share completed the acquisition of Phase I of Prestige Tech Platina, a 533,000 square feet Grade A asset in Bengaluru, for Rs 370 crore. This was the largest property listed on the platform to date. This deal was closed at a 10 per cent rental yield with a seven-year lock-in period. Property Share plans to increase the value of properties listed on its platform to Rs 2,500 to Rs 3,000 crore within the coming year.
Launched in 2015, Property Share has cumulatively raised around $50 million in three funding rounds from investors like Lightspeed, Beenext, Westbridge and Pravega Ventures. Its Grade A properties in Bengaluru, Mumbai, Hyderabad and Pune are leased to blue-chip multinationals including Standard Chartered, Qualcomm and Ansell.
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