BREAKING PROPERTY NEWS – 09/01/2023
Daily bite-sized proptech and property news in partnership with Proptech-X.
Fractal Homes launches second home co-ownership model in Europe for GCC residents
PRESS RELEASE: Fractal Homes, a UK-based start-up offering fractional home ownership across Europe’s capital cities, has launched a second home co-ownership model aimed at streamlining purchasing, maintenance, and upkeep of select properties for GCC residents.
To coincide with this announcement, Fractal Homes has launched a new website and its first offering of four luxury apartments across London.
The initial focus has been on prime properties in sought-after destinations in West London — such as Knightsbridge, Notting Hill, Chelsea, Kensington, and Mayfair. Expansion into other holiday and business destinations, such as Paris and Madrid are planned for next year. Down the line, the company sees potential in ski resorts as well as Mediterranean beach destinations.
Fractal aims to make second home ownership affordable, accessible, and hassle-free through its managed co-ownership model.
The company provides peace of mind to co-owners by offering the full suite of services to support the initial acquisition, as well as ongoing property management, and will offer a luxury hotel-like serviced experience to cater to its customer’s personal needs and demands.
Through the Fractal, app co-owners can manage all aspects of their property, from scheduling stays, and having around-the-clock concierge assistance, to booking private services such as chauffeurs and childcare. Owners also have the option to store personal items in the property, so they feel right at home on arrival.
“Fractal Homes’ platform makes it easy for buyers to own and enjoy second homes in Europe’s most desirable cities. We make second home ownership more accessible by splitting each home into eight equal parts, reducing both the initial capital outlay required to buy the home and also the often-overlooked high cost of running a property. Fractal fully manages the property and takes care of cleaning, maintenance and all operational aspects that come with the running of a home to give our buyers a hotel-like experience” explained Labib Kaddoura, co-founder of Fractal.
“Buying a second home for just a few weeks of usage per year in addition to all the maintenance and operational hassles that come with it makes little sense to us,” continued Kaddoura, “that’s one of the main reasons why we created Fractal.”
The founders of Fractal — who are French and British nationals of Lebanese origin — want to upend conventional second home ownership. The company offers access to prime real estate at a fraction of its cost; creating a much lower entry point for GCC buyers looking to acquire a luxury second home in Europe.
With its predominant focus on customers from the region, Fractal will be expanding its presence in GCC with a new office in Abu Dhabi next year.
“Being from, and having lived in, the Middle East, we know first-hand how beneficial a second home is for individuals and families who spend a lot of time traveling between two countries for business, schooling, and leisure. The attractiveness of European capitals for GCC buyers, coupled with a good market entry point seeing the recent appreciation in USD, make it a very opportune time for buyers to consider the fractional ownership model,” said Wadih Abou Bechara, co-founder of Fractal.
Global multi-stage technology investment platform, White Star Capital, has led the equity portion of financing, with additional debt investment from a London-based private credit fund, as part of Fractal Homes’ $30m seed funding.
Eric Martineau-Fortin, CEO and Managing Partner at White Star Capital, said: “We were immediately impressed by the caliber of the Fractal team, who has identified a key pain point in home ownership that can be solved through the combination of technology and an innovative approach. We’re very excited to be with them on this journey to disrupt the property co-ownership model through their scalable solution. Furthermore, the Fractal team’s ambition is strongly aligned with our views of growing connectivities between the GCC region and Europe.”
Kaddoura and Abou Bechara are former JPMorgan and Merrill Lynch investment bankers who spent the last nine years as co-founders of a boutique debt advisory firm based between London and Dubai.
Government Energy Efficiency Plans ‘Dead in the Water’ Warn Landlords
The Government proposed a target that all new tenancies in the private rented sector should be in a property with an energy performance rating of at least a ‘C’ by 2025. It proposed that this be extended to cover all tenancies in the sector by 2028.
Despite the consultation closing in January 2021, the Government has so far failed to provide any response to it, leading to uncertainty about what will be expected of the sector.
In view of the failure to provide any concrete steps forward the National Residential Landlords Association (NRLA) is calling on the Government to make clear that the dates envisaged in the consultation are now unrealistic. In addition, to provide certainty for the market, it is calling for a definitive timetable for publication of a response to the consultation and any required legislation thereafter.
The Government also proposed that all landlords should be expected to pay up to £10,000 to make the necessary improvements to meet the proposed targets.
The NRLA is calling instead for the amount that landlords should be expected to contribute to be linked to average market rents in any given area. Under the NRLA’s proposals this would mean the amount a landlord would need to pay would taper from £5,000 to £10,000, taking into account different rental values (and by implication, property values) across the country.
Alongside this, the NRLA is calling for a package of fiscal measures to support investment. This should include the development of a new tax allowance for landlords who are undertaking works towards reaching Net Zero.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“We all want to see properties as energy efficient as possible. However, the Government’s delay in responding to its consultation on energy standards in the private rented sector means its plans are dead in the water. The lack of clarity is playing a major part in holding back investment in the homes to rent tenants desperately need.
“In the interests of certainty, the Government needs to admit what we all know, namely that it has no hope of meeting its proposed energy targets for the rental market.
“The plans as they currently stand, rely on a misguided assumption that landlords have unlimited sums of money. The proposals fail to accept the realities of different property and rental values across the country, and that the private rented sector contains some of the most difficult to retrofit homes.
“Ministers need a smarter approach with a proper financial package if we want to ensure improvements to the rental housing stock.”
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
You May Also Enjoy
Why November and December are the best and most affordable months to buy
Farmers protest outside Westminster today in anger at the IHT ongoing debate – expert legal view
Bank Rate cuts boost optimism for 2025 despite Budget pause
How to market to Estate Agents UK
Preventative Measures to Reduce the Risk of Emergencies in a Rental Home
