From an idea to a multi-million-dollar industry: How Kunal Moktan and Hashim Khan changed India's real estate investment landscape

At the corner of one of the busier parts of Koramangala, Bengaluru, an office that hardly had enough space for two desks was the incubation of what would soon come to change the conventional real estate investment landscape in India. The year was 2015, the humble starting point for Property Share, India’s first and largest technology-driven commercial real estate investment platform.

The Spark of an Idea

Kunal Moktan and Hashim Khan, both IIM Ahmedabad graduates from the class of 2007, had made names for themselves in their respective fields before their paths converged again. Kunal at Blackstone, the world’s largest alternative investment manager, where he worked on multi-million-dollar real estate investments and Hashim at Alshaya, a major conglomerate in the Middle East, where he was head of technology.

The two met over a weekend in Bangalore back in 2015 and reflected on the lack of access to investment in prime real estate for the individual investor. “As one of the founding members of Blackstone Real Estate Fund in India, I had helped invest and manage c.$1 billion into Indian commercial real estate, primarily for pension funds and endowments,” Kunal recalled, “and I realized there was no equivalent investment opportunity for the average Indian investor who wanted to invest in rent yielding commercial real estate.”

It was this realization that sparked the idea for Property Share - a technology platform that would allow individual, slightly sophisticated investors to directly own high-quality rent-yielding commercial real estate in micro-markets of their choosing but at a fraction of the asset value. With their combined tech and investment experience, the duo set out to transform this idea into reality by building India’s first fractional ownership platform for real estate.

The Early Days: Challenges and Triumphs

The initial days were not without challenges. The 1-bedroom office space in Koramangala was modest, and the team was small - Kunal, Hashim, and an intern. They faced the monumental task of developing a user-friendly platform from scratch while also trying to attract potential investors with limited resources and a tight budget.

“We started by listing small residential properties. The minimum investment was set at ₹5 lakh, which was still a significant amount for most people,” Kunal recalls. Their strategy was to present a detailed, transparent investment case for each property, similar to the ones Kunal had made to Blackstone’s Investment Committee over the years.

However, convincing investors was far from easy. “We struggled to build a user base. Our marketing budget was very limited and it was tough to get people to believe in us when our office looked like a startup from the 90s,” Hashim admitted with a chuckle. “Like all new startups, we started with getting friends and family to invest and built some word of mouth.” At times, they had to invest their own capital to complete the funding of some of their assets. Their first breakthrough came when an article in The Economic Times highlighted their unique business model, which helped them cross the 1,000 registered user mark on the platform.

Building Momentum

As the platform began to gain traction, Property Share started scaling up quickly. Over the next 12 months, it added 2,000+ registered users and had funded almost Rs. 20 cr. worth of properties through the platform. This was around the time they received interest from Singapore based venture investor BEENEXT who liked what the two were building.

“We were never really keen on outside capital and would much rather have built it grounds up albeit slower. We want to build a business that lasts centuries and not decades.”, Kunal reflected. It is perhaps the reason why Property Share has never actively spent time on fund raising, preferring instead to keep their head down and focus on building the business.

“We met Kunal and Hashim early on - PS was only focussed on small residential units at that stage - we loved their long term vision of building a liquid market for fractional real estate shares though. Allowing retail investors to build wealth and cash flows through shares in fully occupied real estate assets across India and the world. We proceeded to lead their seed round and support in several follow-on rounds.”, recalls Dirk Van Quaquebeke, who is a Partner at BEENEXT.

They eventually decided to raise a small $700k pre-Series A round from BEENEXT and Pravega Ventures which allowed them to move to a larger office, expand their team, and focus on improving their platform’s features.

“Securing that first round of funding was a pivotal moment for us. It validated our vision and gave us the resources to pursue larger deals,” Hashim recalled. With the new capital, Property Share began to focus on larger size commercial properties and attract a more diverse group of investors through digital marketing. With this, their user base grew from a few thousands to around 20,000.

In 2019, they reached another milestone with a Series A funding round led by Lightspeed Venture Partners, a prominent U.S. based venture capital firm. This $4 million investment enabled them to move to a bigger office and grow their team size which was still small at 20-25 people. Despite the fundraise Hashim and Kunal still owned more than 75% of the company. With capital and scale came larger deal sizes – the platform’s first $10 million property funded in just 17 days in January 2020, followed by a $15 million property that was funded in 15 days in August, of that year in the midst of the COVID-19 pandemic.

“We were struck by PropShare’s highly differentiated product that put commercial real estate assets, detailed diligence data and liquidity options within reach of retail investors. Kunal and Hashim brought RE investing and technology expertise, which was quite unique at the time”, said San Francisco based Vaibhav Agrawal who led the investment at Lightspeed.

Forging Ahead with a Revolutionary Platform

While growth was exhilarating, it was not without its hurdles. As the platform grew, so did the number of competitors. New entrants began to take inspiration from Property Share’s established model, thereby expediting the creation of a new industry for fractional ownership of CRE.

“We were pioneers in this space, and that meant we were the first to face the challenges of building a new asset class from scratch,” Kunal explained. “We had to continuously innovate and stay ahead of the curve which also meant our model was widely mirrored by other platforms who had little or no experience in technology or real estate investing.”

Another significant challenge was navigating the regulatory landscape as the concept was new. However, Kunal and Hashim were extremely clear from the very start that managing investors' capital necessitated the highest levels of prudence. Thus, in spite of clear regulations not being in place, Property Share decided to regulate itself using SEBI’s existing Investment Advisory (IA) and Portfolio Management Services (PMS) licenses to facilitate the investment process. Something that is still unique to Property Share in this entire industry. 

While this choice of self-regulation came with a host of compliance requirements like KYC checks, PMLA checks and marketing restrictions, it proved to be the right choice as investors appreciated the benefits of the same.

“We took a conservative approach to regulation, ensuring that we followed all guidelines meticulously,” Hashim said. “Our goal was to not just grow our business but to also ensure the firm was on a solid legal footing.”

Through the Covid period, they continued funding properties through their tech platform, reaching about ₹800 crores of assets under management when West Bridge Capital, a much larger investor, also came in and invested ₹347 crores in Property Share in June 2022 through a Series B funding route. This was by far the largest round of funding raised by any company in the space underscoring Property Share’s dominance and leadership in the segment.

“The Westridge funding was critical as the industry was heading towards regulation and we wanted to ensure we were well capitalised to meet the regulator’s strict capital requirements. It also gave us enough dry powder to fuel our next wave of growth”, says Kunal.

Sky is the Limit

The last property that they funded was an astonishing Rs 370 crores in value – an office building on ORR, Bangalore leased to a US-based Indian technology company, a big leap from the Rs. 60 lakh residential properties that the platform used to struggle with in the tiny office in Koramangala. In 2022, the platform expanded into the UK market, offering investors access to Class A warehousing assets at high cash-on-cash yields. The platform now owns 3 warehousing assets, of which they recently exited one to global PE fund ICG at a c. 31.5% IRR. In July, the platform received approval from the Financial Conduct Authority to launch the platform to UK investors.

Today, Property Share manages assets worth approximately ₹1,500 crores with investments spanning 15+ properties. It has become the largest FOP platform in the country in terms of properties funded, active investor base, as well as external capital raised. The platform serves 300,000 users in more than 20 countries across five continents. Cutting edge technology built by Hashim and team, most of it in-house, has meant that the team strength remains remarkably small at less than 70 people, one of the lowest in a Series B funded start-up.

“Looking back, it’s incredible to see how far we’ve come,” Kunal said. “From a small office in Koramangala to a global platform with a significant market presence, it’s been a remarkable journey. We are very excited to see the next phase of our growth where we aim to touch US$ 1 billion in AUM.”

“We’ve built something that didn’t exist before, and we’ve navigated the challenges to create a successful and sustainable business. The sky is the limit for what’s next.” says Hashim.

Regulations and the road ahead

As the industry grew, it attracted the attention of the securities market regular, SEBI who notified the Small and Medium REIT regulations in March 2024 effectively bringing all fractional ownership platforms under a single regulated structure. All FOP platforms have been given 6 months to apply for the SM REIT license. Platforms will now need to adhere to strict capital and marketing requirements including a minimum net worth of Rs. 20 crores, a 5-15% investment into every property, a 6 member board with 3 independent directors, a mandatory listing of units of each asset on the stock exchange, appointment of merchant bankers and a host of compliances and reporting standards that come with all listed and regulated products.

“We were very happy to see the new SM REIT regulations – it gave us clarity on the way forward while at the same time ensuring the industry was on a level playing field in terms of reporting, compliance and marketing. With the SM REIT regulations, SEBI ensured that platforms adhered to strict guidelines on reporting, incentives and related party transactions while opening the door to a much larger audience”, says Kunal.

On Aug 5th, 2024 Property Share became the first fractional ownership platform to receive the new SM REIT license from SEBI under the name of Property Share Investment Trust (PSIT), paving the way for the next wave of growth for the platform. 

With the recent notification on SM REITs, the fractional model of owning commercial real estate will now be fully regulated by SEBI. SM REITs have been created as a subclass within the REIT framework, providing access to individual investors to rent yielding real estate like office buildings, retail malls, hotels, hospitals etc. that are valued between Rs. 50 and 500 crores. Similar to REITs, SM REIT units will also be traded on the stock exchange. The minimum ticket size has been reduced to Rs. 10 lac which will make it accessible to an even larger audience.

“This is a very proud and significant milestone for Property Share that set the foundations for this regulation more than 9 years ago from that tiny office in Koramangala”, Hashim reflected.

Kunal and Hashim’s journey with Property Share is a testament to how vision, perseverance, integrity and innovation can cultivate a new industry and asset class. From their initial struggles to their recent triumphs, their story is one of transforming an abstract idea into a revolutionary platform that has truly democratized real estate investment in India. In the quiet heart of Bengaluru city, where it all began, the seeds of change sown by two determined visionaries continue to grow, shaping the future of real estate investment for generations to come.

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