Best-in-class, pre-leased, Commercial Property investments

Commercial property opportunities on Grip’s platform are executed through a registered Alternative Investment Fund (AIF) partner of Grip.

In a typical opportunity on an existing CRE Platform, which is structured in the form of a SPV holding the underlying property, an exit from the sale of the underlying property is subject to a lucrative opportunity for selling/disposing the asset becoming available. Once the exit opportunity becomes available, the CRE Platform as the asset manager presents the opportunity to all of the SPV’s investors to decide if the asset is to be liquidated or held. If at least 50% or 75% (as the case may be for each CRE Platform) of the shareholders of the SPV vote to sell, the liquidation process is initiated. Given that the commercial property investment opportunities on Grip’s platform are facilitated through an AIF, the Investment Manager of the AIF will solely decide on behalf of all AIF scheme investors.

Once the asset is sold, the gains (post any taxes and fees) made will be distributed amongst shareholders (including the AIF). The AIF will remit the funds to the respective registered bank accounts of unit holders of its scheme in the relevant proportion of investment.

Typically, leases signed for commercial properties have annual rent escalation provisions. The escalation rate is typically about 15% and comes into effect after every 3 years. However, the escalation rate varies depending on commercial negotiations with the tenant under each lease arrangement.

Please see our response to Question 4 above, the decision to sell depends on an affirmative vote from a special majority of shareholders. If shareholders vote to hold, the investment will continue as is, until the next poll where the process will be repeated.

At the time of making an investment, you will get units of the relevant scheme of the AIF which corresponds to the relevant SPV in which the scheme funds have been invested. The AIF may be able to facilitate exit for a few unit holders of each of their schemes, through secondary transfer of the units held by a selling investor to an incoming investor. Please reach out to us at invest@gripinvest.in if you would like to exit your investment.

A contingency reserve is typically created by the CRE Platform in the books of each of the SPV using the funds raised from the investors. Any unforeseen expenses that arise in the property are met using the contingency reserve. If the contingency reserve is exhausted, the asset manager can use the lease rentals to fund these expenses.

The contribution amount is sent to the AIF funds bank account, and the money received in this account can only be used to invest in companies or return funds to investors, whereas the fee money is transferred to the investment manager's working account because the above condition doesn't apply on the fee amount.