NRI investors have always wanted to invest in the Indian real estate industry. Regardless of market cycles, real estate, particularly commercial real estate, has emerged as a dependable investment. The amount of money that NRIs are putting in commercial real estate shows how valuable this asset is. The main reasons to invest in Indian CRE include the rising need for office space, fractional ownership, physical assets, increasing rental value, etc (commercial real estate).
Top 7 reasons to invest in Indian Commercial Real Estate
Office, retail, and business spaces are all included in commercial real estate. In other words, commercial real estate is a piece of land that is put to use for conducting business. Despite the chaos brought on by Covid-19, the commercial real estate industry is expanding quickly and steadily. The top 7 reasons to invest in commercial property in India are listed below
1. Growing market
India has one of the world’s fastest expanding economies. A high demand for office and business spaces is being caused by the daily growth of new businesses and the expansion of many MNCs in India.
Additionally, the spike in the number of freelancers and entrepreneurs is predicted to significantly increase demand for co-working space and other types of working spaces, making it an excellent alternative for investment. NRIs can invest their money in grade “A” offices to get the benefits of lucrative returns.
2. Regular passive income and cash flow
Commercial real estate assets are designed to provide investors consistent dividends on a monthly, quarterly, half-yearly, or annual basis. Corporate entities, such as MNCs, typically lease real estate for ten to twenty years, which guarantees a steady stream of money in the form of rent.
Both the price of a CRE property and the demand for CRE are always rising. The income from such an investment will consequently grow correspondingly.
3. Diversification
Diversifying your portfolio is crucial if you want to maximise returns and lessen the effects of market volatility. Your portfolio won’t be sufficiently diversified if you only invest in equities, mutual funds, ETFs, etc. to guarantee a steady income during market downturns.
The turbulence of the stock market has little effect on commercial real estate. As a result, you can diversify your investment portfolio by purchasing commercial real estate. In this scenario, even if one class of investments underperforms, you can still profit from investments in other classes.
4. Fractional Ownership
Retail investors can pool money and buy Grade A properties thanks to fractional ownership of commercial property. Investors can easily split the cost of the property and receive a proportionate profit by co-investing. Fractional ownership and online real estate crowdfunding are services that many commercial real estate investment firms provide. They collect funds from investors, buy commercial properties, and concentrate on maximising investor returns by raising the property’s net operating income.
The CRE investment company handles the management and operations of real estate investments, so investors don’t have to worry about fund management or property maintenance.
5. Tangible asset
Commercial real estate is a tangible asset, unlike stocks. Stocks may be valuable one day but may be worthless the next. Infrastructure and land both have high value in real estate. MNCs and other large corporations typically lease properties for extended periods of time, making them a reliable investment.
A property’s value will never be zero even if its market value decreases because it is a tangible asset. An economic recovery in the commercial real estate sector is evident thanks to widespread immunisation and a significant drop in Covid-19 infections. Offices are reopening, and businesses are beginning to function partially from offices.
In India, the commercial real estate sector is expanding quickly and steadily. Have you started making plans to modify your portfolio and invest in commercial real estate in India?
SBNRI will assist you in creating a stable portfolio in an efficient manner if you are uncertain or apprehensive about investing in India since you are unfamiliar with the Indian market.
6. Discover Emerging Neighborhoods
This advice appears to belong in the analyses part, but because it is so crucial to making a safe and long-term investment, it should actually have its own section.
Amazon held a competition among many states a few years ago to determine where it would locate a new headquarters. Due to its exponential expansion and desire to branch out from its established Seattle base across the nation, it was necessary to do this. Why is this crucial? Such events occur more frequently than you may imagine (although not on the same magnitude), and each time they do, the value of real estate in the targeted area soars. There are plenty of low-quality and high-quality jobs available, and there is a flurry of buyers and sellers. Do your homework to earn the potential to significantly profit.
7. Make Sure Your Investments Are Diverse
If you take into account other states and cities, you’ll have more investment opportunities and better investments. The volatility of your portfolio can be decreased and your assets can be preserved by diversifying it across a wide geographic area.
Although buying real estate is not as difficult as it initially appears, there are some guidelines you must follow if you want to maximise your return on investment. Although research is undoubtedly the most important component of every successful investment, you must first thoroughly assess your aim before doing anything else.
A few factors that must be considered while investing in commercial Real Estate are as follows -
- Building's structural integrity and aesthetic appeal
- location of the structure
- The facilities offered by the structure
- The required initial investment and the available funds
- estimated monthly income that the property is expected to produce
- cost projections for upkeep and refurbishment
- Future scope of gains, returns, and earnings
