With the changing market dynamics, there has been a gradual increase in investment by NRIs over the last few years in the commercial realty.
Investing in the Indian real estate sector has always been a prudent option for the Non Resident Indians (NRIs). With the changing market dynamics, there has been a gradual increase in investment by NRIs over the last few years in the commercial realty.
The Indian commercial real estate sector is going through a fresh period of growth which is backed by strong economic fundamentals. Amplifying urbanisation, opening up of the FDI route for retail brands entering into India are the factors favouring the NRI investment in the sector. The depreciating rupee value has also increased the NRIs’ investment in the sector along with the introduction of RERA which has brought transparency and accountability in the sector. The rental yields in real estate are high on commercial assets, compared to residential. Also, capital appreciation is quiet good in the commercial realty. This is what has pushed NRI investors to look for opportunities in commercial real estate here in the country. Also, NRIs’ major concern post-sales is the maintenance of property. So, commercial is a better option as it is leased for a long time and maintaining it is the other party’s prerogative. The commercial real estate market in India is undoubtedly far more organized than the residential sector which makes it a hassle-free segment to invest for the NRIs.
Just like resident Indians, NRIs can avail loans for purchase of property in India and also claim tax benefits under Section 24 and Section 80C of the Income Tax Act. In fact, having bank funding is also a smart way to get your property title papers and link documents evaluated by the bank. With all these, the commercial office space vacancy has reduced by 50% over the past few years.
The cities which are witnessing a vibrant demand for office spaces, malls, Grade- A offices, and co-working spaces are Bengaluru, Mumbai, Chennai, Pune, Hyderabad and Delhi-NCR. In Delhi-NCR, Gurugram has become an investment destination for NRIs to invest in the commercial real estate. Its close proximity to Delhi-NCR makes it an ideal destination for NRIs investment. Gurugram has many commercial spaces available which are attracting the end users. The properties are affordable here compared to the other part of Delhi-NCR.
It can be concluded that NRIs’ investment in the real estate sector, particularly commercial realty, is bound to increase in the coming times with some developers offering projects of international standard.
(By Amit Gupta, MD, Orris Infrastructure Pvt Ltd)