52% of NRIs consider Indian Commercial Real Estate to be the Fastest-Growing Asset Class!
According to a study conducted by the SBNRI, about 52 percent of Non-Resident Indians are considering investing in CRE as a way to diversify their portfolios in the real estate segment, with CRE being one of the top asset classes preferred by NRIs over other asset classes such as residential. According to the SBNRI, the Indian real estate market has started to recover after a long period of stagnation due to the pandemic. The study highlighted that the lucrative investment opportunity has become less complicated for foreign investors, and NRIs are now looking to own a piece of land in their country. Traditionally, the residential sector has been the only real estate option preferred for investment, but with fractional ownership in India, CRE has become the most sought-after investment option as NRIs do not need to invest Rs 5-10 crore to purchase a commercial property, but can instead pool their funds up to Rs 25 lakhs for purchasing a grade A commercial property and reap higher returns.
The demand for CRE investment is largely driven by better returns, with 34% of NRIs citing this as a major reason for investing in CRE. Additionally, around 48% of NRIs consider the convenience of investing in CRE, including the easy process of finding the right properties, to be one of the top reasons for investing. Furthermore, 18% of NRIs cited property management facilities, such as finding tenants, maintaining the property, etc., as the top reason for investment in CRE, compared to the residential segment. On the other hand, the survey showed a contrasting trend in the NRI investments of UAE-based NRIs, with 7% invested in CRE and 9% in the residential segment. Singapore 9% and in the UK 8% NRIs invested in CRE, while 6% invested in the residential sector.
Other countries, such as the US and Australia, have followed suit, with 4% of NRI investments in commercial realty versus 3.4% and 5.18% respectively in the residential segment, according to the survey report. Canada-based NRIs, on the other hand, show less interest with 3% of investments in the real estate sector. The exponential growth in NRI investments can be attributed to several factors. Initially, there was limited access for NRIs to invest in India, but technology integration and standardization of certain frameworks have made it easier for them to do so. The real estate sector in India is an essential part of diversifying investment portfolios, as it offers a variety of passive income streams, such as capital growth, inflation protection, and diversification. The report indicates that around 18% of NRIs have a strong preference for investing in commercial realty, while 9% prefer to invest in residential realty for a diversified portfolio.
Source: bizzbuzz
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
