NRI investors are showing more interest in Indian properties and it’s not the residential sector but the Commercial real estate in India as it is witnessing a gradual increase in capital appreciation and demand while also offering a high and stable rental yield.The Indian real estate market is again attractive after new reforms implemented by the government. The laws and moves change the market dynamics completely. Now, the NRI investors are showing more interest in Indian properties and it’s not the residential sector but the commercial real estate in India as it is witnessing a gradual increase in capital appreciation and demand while also offering a high and stable rental yield.
Reasons why commercial real estate is favourite investment for NRI’s
Increased Demand Of Office Spaces
The commercial growth in the majority of Indian cities and the declaring smart cities is forcing investors to place their bets on the commercial real estate of these places. New IT Parks , IT hubs, SEZ (Special Economic Zone), SIRs (Special Investment Regions) and other regions in cities like Mumbai, Chennai, Delhi NCR, Pune, Banglore, Hyderabad , etc., are witnessing the development of new office spaces. Not just the domestic investor but NRI investors are also able to detect the growing demand of office spaces in upcoming commercial hubs.
High Rental Income
The NRIs have realized that rental income for commercial property is higher than residential and sp started showing an inclination towards this segment. The NRI investors consider rental income as the top reason for choosing their investment target. Comparing the residential and commercial real estate in India, commercial yields higher returns per month.
One of the biggest concerns of NRI investors is rent their property as soon as the completion is done. However, this problem is solved by many commercial real estate developers who offer their assistance to the NRI investors by promoting the space during their building promotion and marketing. They are also offering assured lease tenure of around nine to twenty one years with lock-in periods of three to nine years.
Lower Cost of Maintenance
NRI investors do not have to worry about maintaining the property in its right shape. The commercial spaces are leased out and it is the tenant who needs to take care of the property’s maintenance. The investors can also mention the terms in clauses of the lease agreement as per their requirement beforehand to ensure maintenance work take care.
The appreciation rate in the commercial segment is higher than that in the residential real estate sector of India. Moreover after RERA Act,demonetization and sealing of illegal commercial property, brought the commercial continued to boom. The returns have always been higher in the commercial sector. Moreover, the risk and volatility of market and price trends affect the residential sectors more drastically than commercial.
The RERA Act has streamlined the commercial real estate sector and added transparency to transactions. NRI investors do not have to worry about the projects being delayed or put off by developers owing to these rules.