Licensee: Micro Plastics
- High Gross Entry Yield: 10% (8.6% Base Entry Yield + 1.4% Pre-Booking top-up)
- Long Tenant Lock-in: 7+1 yrs
- Long Lease Period: 9+1 yrs
- Annual Rental Escalation: 5%
- Grade-A Tenant: Leading toy and component manufacturer
- Located in Hosur, Tamil Nadu, a key industrial and warehousing hub
CALL 9820855056 Or 9930881999
The Investment Memo
|No.||Deal Evaluation||Rating Out Of||Rating||Proposal Scenario||Ideal Scenario|
|1||Tenant||1||1||https://microplasticsindia.com/index.html Micro Plastics India is into high-quality plastic injection components and the largest contract manufacturer of toys and has clients like Hasbro, Decathlon, Bosch, APC & more. With the market for toys growing the world over and the Make In India push, we are confident of Micro Plastics as a tenant.||Company with strong fundamentals|
|2||Tenant Industry Outlook||0.5||0.5||The business of toys is growing every year and we expect it to do well.||Industries that can bear the ups and downs of the market cycles.|
|Tenant Stickiness (Lower than Market Rent & Capital Expenditure by Tenant)||0.5||0.5||Lower than the market rate. Capital expenditure by the tenant.||Ideally, rentals should be lower than market
The tenant should have ideally spent CAPEX on the property.
|3||Asset Grade||1||1||Avighna at Hosur is a A-grade asset.||Should be an A-grade asset.|
|4||Asset Location||1||1||Hosur, Tamil Nadu is the hub of industrial and warehousing activities. Its proximity to Chennai, Bangalore, and Hyderabad make it an ideal location.||Should be a business district/SEZ/Industrial Hub|
|5||Lock-In||0.5||0.5||7 + 1 Years||3+ years recommended|
|Tenant agreement signed or LOI yet.||0.5||0.5||Yes, signed||The agreement should be signed & registered.|
|6||Duration||0.5||0.5||9 + 1 Years||5+ years recommended|
|Increment||0.5||0.5||5% Every year||5% per year or 15% every 3 years is recommended|
|7||Rent Start Date||0.5||0.5||Immediate (Given by developer until the property is ready)||Immediate recommended.|
|Deposit||0.5||0.5||10 Months||6 months recommended.|
|8||ROI (Rental Yield)||1||1||10%||8% + is recommended.|
|9||Capital Appreciation||0.5||0.25||Targeted 5% – There’s significant supply that is coming in the market so whether we will get the desired appreciation or not, only time will tell.||Industrial – 2 to 3%, Offices – 5%|
|Exit Options & Exit Load/Hurdle rate||0.5||0.25||Ownership is the form of shares is in Demat format. The exit will take 4-6 months after the initial 1 year lock-in period.
Hurdle rate of 20% over 8% CAGR which only includes capital appreciation. Assuming you make 12 rupees on investment of 100 per year. You will be charged 20% of Rs.4 (Over and above 8% return) which is 80 paise.
|For exit, there should be no lock-in.
Exit should be possible immediately.
The hurdle rate should only be on Capital appreciation of more than 8% and should not include income from rentals.
|10||Asset Manager||0.5||0.5||Strata is one of the leading players of fractional ownership companies in India. They’ve grown well over the last 2 years and now also have backing from Kotak Investment Advisors.||Asset Management companies should be experienced and backed by the right resources to fetch value transactions on the table & also provide timely exits with good returns. They should be tech-enabled and investor-friendly in the form of structuring & execution.|
|Remarks||0.5||0.5||The current Avighna Hosur proposal is one of the best there is. We have personally also visited Hosur and are confident of the asset grade. The 10% entry yield is very attractive and would recommend investing in to this asset.||Our 2 paise (Or cents if you like) on the overall proposal.|
Why Invest In Fractional Ownership Properties?
Here’s a quick comparison of fractional ownership opportunities vs other asset classes. If you are looking at stable recurring income with a possible upside/appreciation on the principle, fractional ownership is highly recommended. And as given above, this is an excellent opportunity.
What the above chart does not mention is liquidity – Commercial CRE scores low on that. While one could argue that the shares are in Demat format – what we mean is that exiting it would still take about 4-6 months.
The ecosystem is still developing – probably in a year or so we would be able to trade your shares as easily as stocks – that’s when we could truly add ‘liquidity’ as a benefit.
For any more questions, you may have, please call Raj Shah on 9820855056 or Rishi Dedhia on 9930881999
This is an excellent opportunity and we recommend you invest. To do that, please call us:
CALL 9820855056 Or 9930881999
For any questions, you may have on fractional ownership click here to view https://investinpreleased.com/fractional-ownership/fractional-ownership-faqs-all-questions-that-may-cross-your-mind-or-not-answered/
For this opportunity specifically, you can download the below documents.
- Strata Investment Memo
- Financial Model Calculation
- Hosur Micro Market Overview
- Tamil Nadu Government Manufacturing Industry Incentives Policy 2020