NRIs Investment in Commercial Real Estate On the Rise; Noida, Yamuna Are E-Way Among Beneficiaries

New Delhi, May 20, 2023: India’s real estate market is poised for growth, with an expected compound annual growth rate of 9.2 per cent from 2023 to 2028.

A recent survey of non-resident Indians (NRIs) has found that 52 per cent of respondents are considering investing in commercial real estate (CRE) in India to diversify their portfolio. The ‘The Neo-Realty Survey’ by MYRE Capital also highlighted that India’s real estate market is poised for growth, with an expected compound annual growth rate (CAGR) of 9.2 per cent from 2023 to 2028. Noida and Greater Noida regions are among the beneficiaries of NCR.

According to the survey, 18 percent of NRIs prefer investing in the commercial sector over the residential sector, with 9 per cent preferring residential. The primary motivation for investing in CRE is the potential for higher returns, with 34 percent of NRIs citing this as a critical factor. Additionally, almost 48 per cent of NRIs find investing in CRE highly convenient, with the ability to identify properties and a straightforward investing process.

Sanchit Bhutani, managing director of Bhutani Grandthum, said, “NCR, especially Noida and Yamuna Expressway regions, are among the preferred locations of NRIs investments. The twin hubs offer immense prospects and high RoI (return on investment). With the international airport expected to be operational in a few years and international companies setting up their headquarters, NRIs are actively investing in the properties in these areas.”

Vikas Bhasin, managing director of Saya Homes, said, “Advancements in technology have made it easier for NRIs to invest in the Indian real estate market. Shortlisting properties, exchanging information and understanding the processes with developers and property consultants can now be done through online interactions.”

He said that as a result, NRIs, even before actually setting foot in the country, have a fair idea of the properties they are interested in. Digital technology has considerably reduced the need for physical visits by NRIs, thus saving their time, money and hassles from hopping from one property to another.

The report notes that fractional ownership (FO) growth has accelerated this trend.

Salil Kumar, Director (marketing and business management) of CRC Group, said, “Noida has emerged as a prime destination for commercial real estate investments. It promises great returns on investments as lately many sustainable A+ grade buildings and projects have been launched in the commercial RE (real estate) segment. Fractional ownership has been preferred by the NRI population as it is economical for them because they come only for a few months in their native country.”

Yash Miglani, managing director of Migsun Group, said, “The favourable rupee-dollar exchange rate is another key factor that makes real estate investment in India profitable for NRIs. Additionally, NRIs have an affinity for their home country and often buy land intending to settle down when they return from their overseas trip.”

Sanjay Sharma, director of SKA Group, said, “Commercial real estate has become a preferred investment vehicle for NRIs due to its high return on investment (ROI), which is typically higher than residential property (8-11 per cent compared to 1.5-3.5 per cent). The Indian government’s wise policy decisions, such as the Real Estate Regulatory Authority (RERA) and goods and services tax (GST), have also encouraged NRIs to invest in the commercial office property market.”

The survey also found that 18 per cent of NRIs believe that property management services, such as finding tenants and managing maintenance, are the main benefits of investing in commercial real estate over residential.

The top cities for NRI investment are Bengaluru, Mumbai, and Pune, followed by NCR. However, interest in regional hotspots like Ahmedabad, Lucknow, Chandigarh, Kochi, and Indore has also increased recently.