Rise in Popularity of Fractional Holiday Home Ownership

Real estate fractional ownership is gaining 'accepted norm' status among investors as assets under management spike globally in keynote residential tourism destinations, confirms TruBoard Partners, the tech-enabled real asset management company. Many more private companies are now entering the ring, setting up fractional ownership platforms that allow investors to own a fraction of real estate assets.

The concept of fractional ownership is expected to be a key growth segment in the real estate sector over the next few years aided by tech-driven platforms," confirms Sangram Baviskar, MD, Real Estate Practice, TruBoard Partners. "Fractional ownership in premium and luxury holiday properties is already growing at a fast clip on the back of double-digit yields. Demand for such properties has risen sharply in the post-pandemic era," he adds, " as hybrid and remote working has become common currency across the globe."

Providers such as MYNE, Denmark’s 21-5 – which now has an office in Hamburg - and French Lazazu are now trying to strike a balance between exclusive ownership of a property and mere rights of use. The new concept is called co-ownership and, unlike timeshare, owners acquire rights of use but also shared title deed ownership. In addition, the providers are trying to keep the circle of owners manageable. With MYNE, for example, a maximum of eight owners share a property, so that it is available to them for rent or personal use for about six weeks a year. Experience shows that this is sufficient: "Our clients want less rather than more usage time," company MD Nikolaus Thomale confirms.

21-5 is offering something similar, albeit it on a larger scale. Here, 21 families acquire shares in five properties, which gives them around 12 weeks of holiday time a year. This is not only a financial issue, but also an ecological one, according to Fabian Löhmer, who is also part of the five-member founding team of MYNE.

It's a similar story in the US and in Asia. Pacaso in the US, which was launched in 2020, enables you to own, for example, a one-eighth share in a multimillion-dollar holiday home of your choosing and enjoy it 44 days per year. In 2023, Pacaso’s $125 million Series C fundraise led by SoftBank valued the company at $1.5 billion. Kooffers a similar model in the Asia-Pacific region.

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