Fractional Real Estate Glossary: 16 Terms Explained in Plain English

Ownership terms

Fractional real estate: owning a share of a property together with other investors, instead of buying the whole unit.

Share: one of the equal parts a property is divided into. Your ownership percentage is the number of shares you hold divided by the total number of shares.

Share price and unit price: the share price is what one share costs. The unit price is the value of the whole property. Amtaar's property pages show both.

Common ownership (الملكية على الشيوع): the legal form under which several people own one undivided property together, each with a defined share. It is set out in Egypt's Civil Code.

Share-sale contract: the contract that transfers your shares to you and states your ownership percentage. On Amtaar it is a common-ownership share-sale contract.

Income and return terms

Rental income: the rent the tenant pays for using the property. Investors receive their share of it after fees.

Rental yield: annual rent as a percentage of the property's value. A property worth EGP 10 million that earns EGP 1 million a year has a 10% rental yield.

Net yield: the yield after costs. On Amtaar, a 5% management fee is deducted from the rental return, so a 10% rental yield becomes 9.5% net.

Capital gain (appreciation): the increase in the property's value over time, realised when it is sold.

Total return (ROI): rental income plus capital gain, as a percentage of what you invested. Amtaar's property pages show a 5-year forecast of total ROI, which is a projection, not a guarantee.

Payout date: the day rental income is distributed. On Amtaar, payouts are quarterly, on 1 January, 1 April, 1 July and 1 October.

Fees, trading and safety terms

Commission: a one-time fee when you invest. On Amtaar it is 2.5% of the share value.

Management fee: the fee for running the property and collecting and distributing the rent. On Amtaar it is 5% of the rental return.

Secondary market: where existing investors sell shares to new ones. On Amtaar you can sell after the first year, to a buyer you find at no commission, or through Amtaar at a 2.5% commission.

KYC (Know Your Customer): the identity checks a regulated platform must run before you invest. In the Amtaar app this means confirming your phone and email, creating a PIN and completing a face check with your national ID.

FRA: Egypt's Financial Regulatory Authority, which supervises non-bank financial activity. Amtaar Capital for Financial Investments is licensed by the FRA to promote and underwrite securities subscriptions.

Putting the terms together

Here is how they combine on a real listing. Park Street East on Amtaar is a 155 m² office with a unit price of EGP 42 million and a share price of EGP 50,000, so one share is about 0.12% of the unit. Buying one share costs EGP 51,250 including the 2.5% commission.

You become a co-owner under a common-ownership share-sale contract, receive your share of the net rent each quarter, and share in any capital gain when the property is sold.