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Props{AMC} is an integrated real estate investment management platform for property owners and investors to invest, manage, monitor and market their physical as well as securities-backed real estate on a transparent and seamless user friendly tech-enabled interface. Props{AMC} will serve as the property manager appointed by the entity that owns the underlying real estate.

This is a model of investment where multiple investors collectively own a property through a Special Purpose Vehicle (“SPV”), share in the rewards, risk and ownership of a high-value, tangible commercial real estate assets, with high potential for capital appreciation in future. In simple terms, by investing a mere INR 20 Lacs in an INR 20 Cr worth of asset, you will get 1% ownership of the asset through holding the securities of the SPV (Company owning the property).

Any Indian citizen, NRI (“Non Resident Indian”), company (Private Ltd Company/ Proprietorship), HUF/Trust, cooperative society can invest in this opportunity subject to valid KYC and regulatory guidelines. Any resident having joint, savings or current account OR NRI’s with an INR denominated bank account with proper KYC can co-own a small office space. NRIs can invest through their NRE / NRO accounts. However, the income and profits generated will be paid in the NRO accounts only.

A small office space is an investment opportunity which will have a monthly or a quarterly yield/payouts while the property is getting developed, and a rental yield/payouts once the property is ready and rented. These yields/payouts will be typically higher than the Fixed Deposit returns in India. Additionally, these investments may offer capital appreciation upon the exit or sale of the property.

An SPV is an entity or company commonly used to invest in or acquire assets such as real estate, companies, and more. Any investment opportunity listed on the Props{AMC} platform will be owned by a SPV, which is a private limited company (Set up under Companies ACT 2013) established exclusively for the purpose of owning the asset and distributing the rental proceeds to its investors.

The Investors can invest in small office space opportunity in two formats: Owning of a share (Equity Shares and/or Debentures- CCDs) of an SPV or a Company, which directly owns the property OR Owning an allotted area in sq. ft. at a designate floor along with other owners through a registered sale agreement.

The investment is in the form of equity shares and Compulsorily Convertible Debentures (CCD's) in a Private Limited Company, incorporated for the sole purpose of acquiring and owning the asset. The Company will be managed by the appointed SEBI registered trustee through its nominated Directors. By holding equity shares in the SPV, you effectively own the asset. The SPV must adhere to statutory requirements, such as holding general meetings and filing returns, which are managed by third-party consultants. This structure ensures that the ultimate decision-making power rests solely with the investors. Therefore, even if Props{AMC} is not operational, your ownership and control of the asset remain secure.

No. One cannot avail any loan against the small office space shares of the SPV.

The Property Manager is appointed by the Investors through an agreement which details the scope of work entrusted to the Property Manager. The Property Manager brings in custodian, escrow manager, escrow bank, auditors, valuators, lawyers, property manager, facility manager to manage the property & investment on behalf of the investors in the process to:

• purchase of the asset,
• distribution of income generated to investors,
• expenses to maintain the property & compliances
• and finally help in exit of investment through sale or transfer of the property

Small office space opportunity is only in real estate backed investments. One can invest in an under construction property with fixed returns with security cover, it can be in a ready-rented property which generates rental income, it can be a property which is at a very advance stage of construction with firm commitment from prospective Lessee. The income, expenses and profits from the property are shared by multiple small office space investors managed by the Property Manager for an annual fixed fee at the time of exit.

Small Office Space Investment is typically an opportunity for an investor to own a small office space (through an SPV) with the underlying asset being commercial properties viz. Commercial offices, retail, schools, hospitality, warehouses. Advantages of small office space investments are:

• Investment opportunities in Grade A buildings located in prime areas, starting at an affordable investment INR 15 lakhs.
• Enables customers to diversify their capital across multiple properties and cities
• Enables customers to hold shares in demat form, which can be further traded
• The cost of managing the property and the SPV is proportional to the investment made.
• Enables investors to transfer shares digitally
• A dedicated property manager and their professional team manage the property and the SPV, providing periodic updates.
• Unconflicted third-party consultants include SEBI-registered trustees, escrow managers, escrow banks, law firms, valuators, Registrar and Transfer Agents (RTAs), property managers, company secretaries, accounting firms, independent directors, and independent auditors.

The minimum investment is Rs.15 lakhs based on the opportunity shown on www.Props{AMC}.com. The committed capital has to be banked within 30 to 60 days from the date of offer opening by the SPV.

There is no lock-in period for the investment in small office space. However, for any real estate investment, it's recommended to stay invested for 5-7 years to unlock its maximum potential. Small office space follows a similar cycle.

There is no maximum limit on investment. Yes, any investor can own the entire SPV.

The investment is completed as soon as the opportunity is fully funded and private placement of investment is done in the SPV. PropsAMC generally has a time frame of 60 days to ensure that the property receives complete funding.

Investors can view the performance of their investments through PropsAMC online dashboard.

Unlike where the investor owns the allotted units through a registered sale, the income generated from the Company owning the property cannot be considered as Income from house property since it is an investment in securities of a Company. Further, all income generated attracts applicable TDS and the gains attracts short term and long-term gains in the hand of the Investors. Every product will have its own tax liability. It is advisable to seek advice from a tax expert or request to the Property Manager for clarification based on your invested product.

For Indian residents, you will be paying taxes on rental payouts and on capital appreciation. Rents: Rents received from the property are distributed as interest on debentures. It is taxable in the hands of the investors under “Income from Other Sources” at the applicable tax slab. Capital Appreciation: Capital appreciation is subject to capital gain tax at applicable rates. The applicable tax rate would depend on the period for which the shares and debentures were held (short-term vs long-term). Short-term Capital Gain will be applicable if the shares and debentures are sold before 24 and 36 months Respectively.

This will be taxed at the rate applicable to the investor. Long-term capital Gain will be applicable if the Shares & Debentures are held for more than 24 and 36 months respectively. It will be taxed at 20%, irrespective of the quantum of gains. The benefit of indexation may be explored in the case of long-term capital gains. (Holding Period > 2 years for shares and 3 years for Debentures). Short-Term Capital Gains occur when shares or assets are held for less than a specified duration, usually less than 12 months. Gains from unlisted equity shares are categorized as Short-Term only if the holding period is less than 24 months.

Short-Term Capital Gain Tax on Debentures and Bonds

• Capital gains arising from transfer of market linked debentures would always be deemed as arising from transfer of Short Term Capital Assets irrespective of the period of holding of such assets.
• Capital gains on the sale of unlisted debentures and unlisted bonds transferred from 23rd July 2024 shall always be Short-Term
• The aforesaid assets are taxable at slab rates, irrespective of the holding period.

You can sell your small office space holdings to anyone you may know, such as friends, family members or third parties. You will be required to execute the necessary transfer documents for the same. PropsAMC will provide you with the valuation of your holdings if you need assistance in setting a price.

Investors can exit their investment privately through their network or through us by leveraging the secondary re-sale listing on our platform. Please contact your dedicated investment manager to know more.

• In case of the property owned by the SPV/ Company-the Company appoints the Custodian or a Trustee to hold the original title documents of the property. The Investors get shares or debenture certificates of the Company proportionate to their investment. The investor appoints the Property Manager to do overall management of the investment as described above. The original title deeds and other property-related documents, including the Shareholders Securities and Subscription Agreement ("SSSHA") (executed between the SPV and Seller), Agreement to Sell/Sale Deed (executed between the SPV and Seller), title report, permissions, car park allotment, letter of possession, and any land ownership documents, are kept in the safe custody of the SEBI-registered trustee. The investors get physical Debenture certificates or CCDs in demat issued by the company as the proof of proportionate ownership of the company and the property.
• In case of allotment of property – the developer or seller will execute a registered sale in favor of the investor and the original documents will be kept with investors. The investor appoints the Property Manager to do overall management of the investment as described above

If a property does not eventually close due to any risk arising from the due diligence, Props{AMC} will refund the token amount to the investors without any deductions. Please refer to the T&C outlined in the EOI document (Expression of Interest) for further details.

Initial token amount is INR 100,000. Once an initial investment or token advance is paid, the investor gets access to Title documents and other confidential data for their perusal. If the investor chooses to withdraw/back out of this opportunity before the actual allotment of the subscription, then the entire initial token will be refunded back to the investor without any deductions.

The Property Manager will charge a standard fee of 0.5% + applicable taxes as Property Management Fees per annum deductible from the periodic payments.

Typically, the Property Manager doesn’t charge any annual fees if there is no income. However, the Property Manager shall be entitled to claim the annual fee for the period when there was no income once the Company owning the property or the allotted Property starts generating income. In case it doesn’t generate income till it is sold then the same calculations will apply as described in Point No. 6 above.

Once the token amount is paid, and the Expression of Interest (EOI) and Letter of Intent (LOI) are signed, investors can view and download Title Search Report, Valuation Report and all relevant property-related documents for due diligence. These include the Title Note, Valuation Report, and Occupancy Certificate.

While investing through Props{AMC}, investors will be required to sign the Expression of Interest (EOI) as the initial step. This will be followed by the Letter of Intent (LOI), Share Subscription and Shareholders Agreement (SSSHA), and PAS-4, which will be executed in a step-by-step process.

To verify that the asset has a clear title, investors can refer to the Title Note, which provides a summary of the property's legal status. Additionally, investors may choose to conduct independent due diligence on the property, which can include a comprehensive review of ownership records, encumbrances, legal disputes, and regulatory compliance.

Monthly/Quarterly distributions to investors are made in the form of 'interest' and are accordingly taxable in the hands of the investor as per his/her income tax slab rate. The indicative 'tax deducted at source' (TDS) under the current income tax regime, on such distributions, has been reproduced below:

• Residents - 10% (plus applicable surcharge and cess)
• NRI - 30% (plus applicable surcharge and cess)

TDS Certificate will be issued every quarter by Props{AMC} on behalf of the SPV. The same will reflect in the Form 26AS of the investor.

NRI's can explore benefits under the Double Taxation Avoidance Agreement (“DTAA”) entered with the respective country, subject to availability of Tax residency Certificate (“TRC”).

Capital gains tax is attracted at the time of exit from the SPV on sale of securities of SPV (Private Limited Co). Depending on the tenure of investment it will either be classified as long-term capital gain (LTCG) or Short term Capital Gain (STCG). The benefit of indexation is no longer available in the case of long-term capital gains for resident investors for investments made after 23rd July, 2024.

Taxation for Resident Investor: Short term capital gains (STCG) - Taxed as per your tax slab Long term capital gains (LTCG) - 20% with indexation benefit Taxation for NRI Investor:)
Short term capital gains (STCG): Taxed as per your tax slab. Long term capital (LTCG) - 12.5% (No indexation benefit)

The Government (Post Budget 2024) has given the option to compute taxes either at 12.5 per cent without indexation or at 20 per cent with indexation on real estate transactions.

This relief applies to the transfer of long-term capital assets, such as land or buildings, acquired before July 23, 2024. The proposed amendment will enable the taxpayers to compute taxes under both schemes. They will have a choice to pay tax under the scheme in which it is lower. July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001 that had caused a lot of concern over its impact on long-time owners of property assets. The proposed amendment will apply not only to real estate transactions but also to unlisted equity transactions.

Yes, the tenant pays GST on the rentals as applicable.

All tax documents including the quarterly TDS certificates will be made available on your dashboard. For any other tax documentation, please reach out to your dedicated Props{AMC} investment manager.

The rentals received by the SPV are subject to 10% TDS and are treated as business income in the books of the SPV. The rental income after deduction of expenses is passed on to the investor as interest on CCD. The interest distributed to investors is only taxable in the hands of the investor and does not attract any taxation in the SPV.

Capital gains tax is attracted at the time of exit from the SPV on sale of securities of SPV (Private Limited Co). Depending on the tenure of investment it will either be classified as long-term capital gain (LTCG) or Short term Capital Gain (STCG). The benefit of indexation is no longer available in the case of long-term capital gains for resident investors for investments made after 23rd July, 2024. No, the structure is effectively pass-through. Only a single level of taxation, in the hands of the investor, will be applicable on the monthly/quarterly distributions.

Asset Level Risks: That there are Asset Level Risks associated with the Property which at under construction level includes undue delay in completion of the Project, delay in receipt of Occupation Certificate & Possession, litigation, etc. and post occupation includes non-payment of rent by the tenant, tenant vacating without notice, tenant company winding-up, tenant employee strength reducing, tenants trashing the Property on their way out, damage by trespassers, or rent negotiations. For e.g., during a pandemic there can be a restriction or lack of need for office space, thus, resulting in a brunt to the revenue.

Credit Risks: That there are Credit Risks associated with the Property which include obtaining loan on the allotted area, the length and stability of the income to be generated in future from the Property

Liquidity Risks: Liquidity Risks associated with the property and the investment refer to the ability to sell the property or exit the investment without incurring significant losses. The liquidity of the property is largely influenced by market conditions, including demand, investor sentiment, and broader economic factors.

While any small office space investment’s strategic location and established infrastructure do help mitigate these risks to a certain degree, shifts in market demand, changes in investor appetite, or adverse economic trends can still impact the ease and timing of a sale, potentially leading to a less favorable exit. In other words, while the property may be well-positioned in terms of infrastructure, the ability to quickly liquidate or realize full value can fluctuate based on external market dynamics.

This could affect the investment's overall flexibility and returns, particularly if the market experiences downturns or reduced demand for properties in this segment.

Governmental Risks: Governmental risks encompass any actions or changes in regulations that could impact the property's value or the investment’s profitability. This includes shifts in property laws, tax policies, or the potential requisition of land for public infrastructure projects, such as road expansions or metro construction, which could reduce the property's utility or marketability. These risks can affect both the long-term value and income stability of the investment. Furthermore, external factors like political instability could disrupt business operations, resulting in operational delays or property damage, ultimately affecting the expected returns. Given that these risks are often outside one’s control, they represent an added layer of uncertainty that could influence the property’s income-generating potential and liquidity.

Replacement Cost Risks: That there are Replacement Cost Risks that a property may become functionally or economically obsolete due to the arrival of newer properties with a better offering at the same or similar rental prices. Again, comparing our commercial premises to other upcoming & newly constructed commercial premises in the vicinity increasing the supply of office space directly affects the quantum of lease rates and demands the imminent need to justify the lease rentals.

Mitigants: Steady Rental Income: The beauty of Small Office Space opportunity is the steady rental/assured returns distribution from Day 1 of the investment for a significantly long period of time.

Accessibility in Commercial Real Estate: An investor gets access to multi crore worth if property with a minimum ticket size of INR 15 lakhs making investment accessible. Another advantage of commercial real estate is the stability it offers through long-term tenants. Typically, businesses occupy these spaces, and due to their focus on growth and operations, they are less likely to vacate on short notice. Companies, operating on a going-concern basis, prefer minimizing disruptions and administrative challenges that come with relocating. As a result, they are often eager to maintain continuity by renewing their leases at the same premises they've occupied for years. This makes commercial properties a reliable source of steady, long-term rental income for investors.

Assurance on Title: Additionally, the thorough technical, title, and financial due diligence conducted by experts provides a strong assurance to investors. This due diligence confirms that the property is equipped with all necessary utilities, the title is clear of any encumbrances, and the tenant has the financial capacity to pay rent for the foreseeable future. Moreover, any small space investment property is positioned to generate consistent revenue, with potential for value appreciation, as confirmed by assessments from professional valuers, law firms, and chartered accountant firms. This comprehensive evaluation offers investors peace of mind, knowing the investment is solid and well-supported by expert analysis.

Professional & Experts Involved: To ensure the protection of investors' interests, a Trustee/Custodian has been appointed to oversee the process. In addition, the project benefits from the involvement of a highly skilled team, including experienced Property Management Companies, Law Firms, Tax Consultants, Escrow Managers, Bankers, and Project Managers. With a combined total of over 300 years of expertise, this team is dedicated to managing, safeguarding, and growing your investment on your behalf, providing investors with the confidence that their assets are in capable hands.