hBits, an Indian fractional real estate ownership platform, has secured regulatory approval from the Securities and Exchange Board of India (SEBI) to raise more than Rs 500 crore through a Category II Alternative Investment Fund (AIF). The raised funds will be utilized to invest in commercial real estate investments across the country’s key markets. It will be the first time a fractional ownership platform to raised funds from investors through an AIF, including global institutions, the company said in its announcement on 13 July 2023.
The AIF’s investment strategy focuses on Grade A properties, including offices, data centers, warehousing projects, retail spaces, and hospitals. The investments will span across under-construction, pre-leased, and completed projects, targeting the top six cities in India.
To facilitate international participation, hBits is establishing the Global Investors Feeder Trust (GIFT) in GIFT City, providing foreign investors with valuable tax benefits and cost-effectiveness. This feeder fund structure ensures compliance with regulations and robust regulatory oversight to safeguard the interests of foreign investors. A feeder fund is an investment vehicle that pools capital commitments of investors and invests.
The platform has successfully facilitated the acquisition of nine rent-yielding properties, all located in Mumbai. These commercial properties have marquee tenants such as ICICI Bank, IIFL ATPI, Ingenico Group, and Viaante Business Solutions, among others.
Fractional ownership, a core aspect of hBits’ business model, has proven to be an innovative and efficient means for investors to access income-generating real estate assets without the burden of substantial financial commitments. By pooling funds, investors gain passive ownership of high-value assets, making real estate investments more accessible and inclusive.