Fractional Real Estate permits property owners in Lebanon to issue shares for sale through a safeguarded platform (Hayek Group- HG). These shares denote a certain fraction of total shares for a real estate asset.
Property investors can buy these shares, and by doing that, they become partial and silent owners of that property, which further allows them to be involved in cash flows and real estate appreciation.
A Prime Investment Product
Investors have an interest in real estate, but it’s a cumbersome asset to own and sell. There is a significant barrier to entry for small investors when it comes to hi end properties. With fractionalization, real estate converts from a somewhat illiquid to a liquid asset.
The fractional ownership feature of real estate assets opens the market to a much wider investing community. The result potentially could lead to greater access for small investors to take a stake in assets that they usually wouldn’t be able to own through direct purchase.
Furthermore, it facilitates access to real estate investment in prime properties that the investor usually wouldn’t have access to. From the point of view of the real estate developer, it increases the potential of getting a project funded and actually, earlier access to capital.
HG is creating the first-ever platform on the Lebanese market based on fractional real estate investment. The platform allows investors to be part of our portfolio in a simple and protected way.
HG provides property investors with an opportunity to invest their assets in the real property sector, through selected prime properties.
HG targets to solve the problems related to Lebanese real estate transactions by means of creating an asset transfer platform for the building industry. Fractional Real Estate aims to help real estate investors by removing mediators, improving transparency and liquidity, and lowering barriers to entry.
HG’s network, after all, can reduce risk aversion through a trustless environment. In turn, this simplifies property transactions with the need for trusted third parties. Local market demand for transparency has impelled innovation in real estate fractionalization.
Fractionalization of assets makes many processes associated with property financing arise faster and at a significantly lower cost compared to mortgage and standard lending procedures.
Summary
For the first time in the real estate market in Lebanon a platform based on fractionalization is being launched. It provides local investors with an easy alternative to safely buy into a stable and proven real-estate market. Moreover, the platform enables the opportunity to invest capital via direct transaction.
HG is the experienced team behind the enterprise. It is a family company made of expert engineers, who have been involved in property development, as well as investments in real estate with enormous potential since 1951.
Properties are available for purchase by both Lebanese expats and international investors. Fractionalization will globalize the Lebanese estate market and make investing very easy and profitable.
In contrast to many real estate investment projects, HG’s offer is based on real, fixed assets. The investment model has been constructed in a specific way – it is clear and effortless to understand, hence making the project a simple and effective tool to earn money. Nevertheless, the company’s investment portfolio is the outcome of a thorough and meticulous analysis of the real estate market in Lebanon.
The idea of investing capital in fraction realestate is going to accelerate reaching the set goals, raise the potential profits for the clients and open up the Lebanese market for expats and investors from abroad while simplifying the whole procedure.
In order to fully benefit from the solution offered by HG, a potential client will have to:
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Commit a desired capital to invest in the market.
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Register on the provided platform.
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Choose a property that he would like to invest in.
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Specify the number of shares.
These four easy steps will allow anyone to become one of our investors and benefit from market uptrend track record of the Lebanese real estate.
Overview
Having gained a considerable amount of experience in the real estate market, managed and completed a vast number of projects, HG decided to offer an innovative solution. Our plan expedites the increase of the number of investors both from Lebanon and abroad. Such divergence of the capital sources makes the whole enterprise more stable and raises the competitiveness of the company’s market share mostly for modernized residences; newly erected buildings.
The main obligation of our creative, experienced and competent team is a thorough selection of the real estate properties, an evaluation considering their current market value, prestigious and comfortable location followed by expected profitable revenues. In contrast to a large number of real estate investment techniques, the one being initiated by HG is based on real, fixed assets with an appropriate value. To summarize what has been stated earlier, the fractionalization will not only encourage the growth of the Lebanese real estate market, but it will also enable small investors to take part in it.
General Information
Real estate as a part of fixed assets is still the biggest class of assets when it comes to their value. According to the Central Bank of Lebanon, the total amount of loans for the private sector is 56.3 Billion USD, where the total value of mortgage loans is 13 Billion USD and loans given for contractors are 11 Billion USD, while additionally the current investment portfolios of real estate projects in Lebanon sums up to 17 Billion USD.
Similarly, to other areas of life, the real estate market is subject to new trends. In Lebanon, there has been a major growth in demand for luxury, prestigious, distinctive and unique small housing units. This kind of apartments are desired mostly by wealthy residents of Beirut and Mount Lebanon, who value comfort and want the property to have original qualities expressing their eccentricity. Typically, the most demanded are properties located in Achrafieh Verdun, Ras Beirut and the coastal stretch North and East of Beirut.
During the course of the years of urbanization, Lebanese cities have been expanding and nowadays it is much more difficult to find centrally located plots to erect new housing projects. If you combine this fact with the new trends described above, the conclusion is simple; locating prime properties combined with arranging a sustainable, affordable, small area and unique design in new residential projects is a great way to provide the supply for the increasing demand for unconventional housing. Hayek Group notices the opportunity to explore that realestate segment based on its confidence in the market and already launched a $47 Million two towers in Achrafieh with small apartments ranging from 90 m2 to 110 m2 in area.
The current value of housing sector in Lebanon is estimated to be around $4.5 Billion of available units. According to the Order of Engineers & Architects, the licensed area of flats and apartments has decreased in 2018 by 23.2 % YTY. At the same time, the market has been slowly adapting to the needs of middle income families. More and more people prefer to live not only comfortably, but also in smaller units close to their work.
Considering the estimated growth of the number of households in the next few years and the current excess of supply of flats in Beirut and Mount Lebanon, it is a natural conclusion to draw that the downturn in the market will not continue but it will stabilize in size. What is more, the demand keeps growing for one more important reason – a lot of foreigners move to Lebanon also GCC citizens are seriously considering Lebanon as a second home destination,
Lebanon is currently one of the most promising emerging markets and a leader in the Middle East. Despite that, average prices of real estate are still far below the level of well developed countries. HG continuously monitors the regional trends and creates special offers to clients from the premium segment of the market. At the same time, the team remains open minded, trying to learn about new trends and implement them.
Small Investors’ Perspective
Investing in real estate in a traditional way is extremely time-consuming, expensive and complicated, which can be explained by:
• The need of hiring and paying various experts (brokers, lawyers), which increases the costs long before being able to benefit from the investment.
• Information irregularity caused by a limited access to real estate data and high competitiveness, consequently making the transactions less comfortable and secure.
• Lack of a digital system to process transactions – most of them is still made in a traditional manner of a paper contract. Again, it is very time-consuming, slows down the whole investment and may result in the real estate appraisal to be less accurate.
• Preparation and waiting time. Nowadays you can buy and sell assets by a single mouse click. However, when it comes to the real estate market, you have to be extremely patient. First of all, you need to find your desired property, contact numerous institutions to clarify its legal status and, then, make an appointment with a notary to make a purchase.
The goal is to eliminate all the barriers discussed above by implementing their own special platform. Thanks to HG, users are going to be allowed to safely invest in real estate while not taking the traditional risks and expenses. It is time for the market to embrace new real estate secured technologies that allow users to manage their assets and estimate their value in real time, as well as benefit from a professional customer service. Combining it with the secured ownership by having a clean title deed, it is going to stimulate the entire market.
Description of HG Platform
The purpose of HG platform is to promote several selective real estate opportunities. The platform enables investing into properties from our portfolio. An immense amount of experience and understanding of the problems faced by investors made HG notice the potential of liquidation in the sector. The whole concept of the platform is incredibly simple and transparent. It ensures the safety and stability of transactions.
Selected prime properties are going to be offered to local and overseas Lebanese investors on the designated platform. A potential client is going to be able to physically hold a desired share in the properties in the form of a title deed. Simultaneously, he is going to be presented with all the important estimations, including the profit forecast. HG team is going to operate the processes of purchasing, monitoring and reselling the shares, which should provide investors with a lot of comfort and security, especially because they are going to have precise information about important details of investments.. In return for their contribution every investor is going to receive a title deed and a preferred sales contract that states standard particular conditions and investment details
The investment rate provided for every project is an indication of profit allocated to the investors by the end of an investment term (Max 10 years). Having finished one investment project with HG, investors will have the option of reinvesting their capital into next real estate opportunity offered by the company. In order to start investing on the platform, every user will have to undergo a KYC verification (Know Your Customer). Then, a verified user is going to receive the access to the full offer and financial details of every property. HG Platform is going to provide a lot of information and have several different functions and grading systems, including showing available properties, total pricing and estimated profit and choosing the scale of the investment.
Selection of Real Estate Opportunities
Our company overlooks prime properties and invests in similar projects in order to promote the greatness of some properties by making them highly attractive, affordable and designing the interiors in a smart, modern style.
Adding fraction realestate to HG portfolio is always a result of thorough consideration of some key market aspects like price, community, location, environment, legal risks and exit strategy.
Community
Attractive architecture is equally important and so is the economic perspective. Residences appeal to us the most because of their unexploited pure potential. By preserving the original social value of community and merging it with modern solutions aimed at providing comfort and functionality to residents, we head hunt exceptional products, good enough to satisfy the most demanding investors. We emphasize a synergy between classical elegance and a modern design, creating original artistic spaces. Creative ideas become reality thanks to our attention to detail and the highest quality of the workmanship.
Appealing Prime Locations
Visual and city planning values are not the only important factors in our decision-making process. A very efficient location is very meaningful as well. Our strategy involves investing in the most desired, biggest and, at the same time, fastest growing locations: academic, business and tourist centers. Having established the fact above, we narrow our search to the most desired areas – usually in the center or in a close proximity and with a good infrastructure. Another important element to consider is cozy, intimate surroundings, keeping the balance between the exclusivity of a property and good commuting options. The optimal choice of a location allows maximizing the profits
Fractionalization
It is a technology that offers a high level of diversifications and transaction convenience, guaranteeing safety and offering clear rules. We are going to use this technique to provide a decentralized, stable, transparent and efficient platform that allows clients to invest in real estate through direct purchase of property shares. The platform has the following advantages:
• It gives equal access to information to every market participant and, additionally, reduces the risk of transactions.
• The decentralization ensures the data safety and provides the opportunity to access and manage own portfolio from anywhere in the world.
• It allows us to digitize the data, accounting and property management systems, which effectively lifts the geographical barriers between the investor and the investment.
• Title deeds for investors are a safeguard of ownership in real-world assets.
Hayek Group Networking
Based on an extensive experience in the local market, HG will provide a wide selection of prime properties to be a part of the network. Most of such properties will be family homes, and the owners are highly qualified to retain the shares as per the preferred contract terms.
The Investment Process
In the pursuit of making a purchase of assets, each investor will have to set up a user account of a given currency exchange, pass all necessary verification procedures regulated by the local authorities.
In the next step, the investor can choose one or more properties offered on HG platform and invest in the desired one. Each property is going to have a value in USD. We allow a major spread when it comes to the volume of investments and the number of shares. The investor is going to have the opportunity to own a specific amount of shares at a convenient price as per the appraisal done by HG
Smart Contracts
HG is going to use smart contracts, which will automate most of the processes, making the whole operation far more dynamic and less expensive. The trust contracts between HG and platform users are going to take a form of a smart contract.
Smart contracts are a special type of contract that codes instructions designed to perform specific tasks at a specific time. They function as self-executable programs that become active after the parties have fulfilled the terms and conditions preceded in them. Smart contracts are unmodifiable, which guarantees that the investor knows the precise and unchangeable rules applicable to the entire transaction and has the guarantee that during the investment nothing can alter the agreement. What is more, smart contracts enable and encourage independent control of profits based on fixed individual rates for real estate.
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