A total of 52% of NRIs consider investing in commercial real estate (CRE) to diversify their portfolio in the Indian real estate segment, says a new report by fintech company SB NRI. As per the survey, CRE is one of the most preferred asset classes for NRIs. As per the report, with fractional ownership emerging in India, CRE investments have become most sought after as NRIs no longer have to inject Rs 5 crore to 10 crore to purchase a commercial property. Instead, a set of investors can pool their funds as minimum as Rs 25 lakh to purchase a Grade-A commercial property and enjoy higher returns.
Why NRIs prefer CRE investment
Around 34% of the NRIs mention that a major reason to invest in CRE is that the demand for investing in this segment is largely driven by acquiring better returns. Additionally, around 48% of NRIs believe high convenience including the seamless process to invest and finding the right properties when they invest in CRE. Furthermore, 18% of NRIs consider property management facilities like finding tenants, upkeep of the property, etc. as the biggest reason to invest in CRE than the residential segment.
NRIs from countries investing in CRE vs residential segment
As per the SBNRI report data, NRIs from top countries investing in CRE include Singapore (9%) and UK (8%) have outperformed the investments made in the residential sector that amounts to 6%. Countries like the US and Australia have gradually picked up the trend with 4% of NRI investments made in CRE as compared to 3.40% and 5.18% of investments in the residential segment. The survey report highlights Canada based NRIs show lesser interest with 3% of investments in the Indian real estate sector.
Also, the survey report showcases a contrasting trend in UAE-based NRI investments with 7% of investments being made in the CRE while 9% in the residential property segment.
According to the survey report, around 18% of NRIs are strongly inclined towards investing in the commercial realty segment while 9% prefer to invest in the residential segment for a diversified investment portfolio. As a result, CRE is projected to continue gaining traction among NRIs from different countries, making it a major asset class in their Indian investment portfolio.
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