According to a Neo-realty survey by MYRE Capital, which analyzed the investment appetite of roughly 5,000 NRIs across 13 countries, millennial investors are increasingly investing in Indian commercial real estate, with 53 % of NRI investors being millennials.
Passive income for the family, portfolio diversification, lack of other secure options, and tax-efficient returns are just a few of the commercial real estate (CRE) development drivers for NRI investors. The top three investment centres for NRIs are Bengaluru, Mumbai, and Pune, where office spaces remain the most sought-after asset and school spaces are emerging as a new CRE asset.
What The Poll Says
According to the poll, CRE is preferred by 53 % of NRI investors over ETFs (21 %) and Mutual Funds (19 %), with an average ticket size of INR 38 lakh for an NRI vs INR 38 lakh for a local CRE investor.
Surprisingly, 82 % of NRI investors have never invested in India before, citing accessibility concerns, a lack of transparency and confidence issues.
“We performed this study to see if new-generation investors encounter the same entry barriers as GenX investors.” We were pleasantly delighted to learn that assets such as office space, student accommodation, and schools are increasingly attractive to investors. We think that growing knowledge and access to Grade-A properties would encourage more NRIs to investigate this asset class,” said Aryaman Vir, MYRE Capital’s Founder and CEO.
Investors from Bengaluru and Mumbai (a combined 45 % of the respondents) have expressed a geographic interest in investing in cities where they were born. Given the pandemic, global corporations are expediting the transfer of operations to a more digital-focused approach. Bengaluru has been home to India’s largest IT corridor, offering office space for some of the major MNCs.
Bengaluru, the world’s IT/ITES centre, has seen continuing increases in demand from multinational corporations and has been able to maintain market growth while maintaining vacancies in the single digits.
“Because millennials and high-paid senior executives make up a major portion of these NRI investors, there is a natural propensity to invest in fractional CRE, which is far easier to handle than any other kind of traditional real estate ownership,” Vir said.
Hassles Remain For NRIs
The poll also finds that NRI investors continue to face obstacles when it comes to investing in CRE (property management, tenant management, legal diligence, asset identification, asset management, etc.).
“We’re striving to close this gap through technology and a futuristic investing platform. Our objective is to create a platform that focuses on knowledge, transparency, and trust for investors to facilitate real estate investments in institutional quality prospects, allowing us to democratize a historically outmoded asset class and reposition Indian CRE on a global stage,” he said.
MYRE Capital has launched five properties in the previous 12 months, totalling INR 175 crore in assets under management. MYRE has a user base of over 30,000 people and investments in Pune, Delhi NCR, Bangalore, and Mumbai. NRI investors from 16+ countries account for 37% of the users.
