Why is Lease Rental Discounting (LRD) in high demand and how are businesses and individuals procuring funds for it?
YieldWiseX, leveraging the burgeoning demand for Lease Rental Discounting (LRD), has devised a unique framework with managed leasing companies to raise debt, ensuring risk-adjusted returns. It presents businesses and individuals an opportunity to tap into the rental income from their properties without needing to sell or interfere with existing tenancy arrangements. The process begins with an assessment of the property’s location, profile of founders and directors, tenant’s profile, rental income. The loan, based on expected rental income, is then approved, offering immediate liquidity which can be used for various purposes including asset acquisition, working capital management, cash flow improvement, or business expansion.
What were the top-3 deals executed via your platform in FY23/CY23 (as on date)? Please share some details.
Last year we launched LRD Framework and it was one of the most successful opportunities we have witnessed in terms of funding per day. Lease Rental Discounting is a new framework offering retail investors short-term, close-ended investment opportunities. The success of LRD is evident in completing three opportunities, including Skootr LRD (worth INR 20.45 crore) in less than 25 working days and Attic Series A and B in 14 and 6 days (worth INR 27 crore), respectively. These opportunities allowed investors to leverage rental income from Skootr and Attic – managed leasing players, supporting their business expansion. LRD’s structured nature and potential for steady income appeal to investors, who appreciate supporting and benefiting from managed leasing players’ growth.
What was your revenue in FY22, FY23? What were the reasons for growth?
Our cumulative revenue for FY22 and FY23 was around Rs 15 crore with an AUM of over Rs 200 crore done in the last 2 years. This growth can be attributed to several key factors that have driven our success. Firstly, we have experienced remarkable expansion in our user base, with a consistent year-on-year growth rate exceeding 100 per cent. This rapid increase in user numbers has directly impacted our revenue, expanding our customer reach and engagement. Today, our platform has over 50,000 interested users from 16 different countries, creating a diverse user base that contributes significantly to our revenue growth. By catering to individuals from various regions, we have tapped into different markets and captured new revenue streams.
What is driving the growth of the commercial real estate sector, and which cities are emerging as important trends in this industry?
India’s commercial real estate sector is witnessing robust growth, spurred by various pivotal trends. As the post-pandemic economy gradually reopens and expands, companies are increasingly recruiting talent from Tier 2 and Tier 3 cities. This nationwide hiring trend is leading to a surge in the hub and spoke office model, further boosting the sector’s expansion. Additionally, recruitment surges in sectors like IT, BPO, and Pharmaceuticals are contributing significantly to this growth. Concurrently, the revival of physical office spaces, the proliferation of thriving businesses, and the escalating popularity of co-working spaces are integral to this upward trend. The wave of digitalization, which is leading to an increased demand for data centers, forms another critical part of this growth narrative.
What is the outlook on the PropTech sector, and why is there a rising interest from emerging high-net-worth individuals (HNIs) and accredited investors in alternative investments in commercial realty?
The PropTech sector, an amalgamation of technology and real estate, is experiencing significant growth, opening a world of opportunities, from virtual reality tours to smart city initiatives. Concurrently, a rise in interest from high-net-worth individuals (HNIs) and accredited investors towards commercial realty as an alternative investment has emerged, driven by the potential for portfolio diversification, stable income, property value appreciation, and an effective inflation hedge.
What are the benefits of leveraging real estate against future cash flows?
Leveraging real estate against future cash flows can offer numerous benefits to investors. It allows for enhanced returns, as it lets investors acquire more assets with less equity. It generates steady cash flows which can service the debt used for leverage. Leveraging can lead to asset value appreciation, providing a significant boost to returns. Leveraging can also offer tax benefits, effectively reducing the cost of debt. While it carries certain risks like potential for losses and increased debt, prudent leverage can significantly improve returns and promote sector growth. Thus, it’s crucial for regulators to consider this in policy-making.