Shahid Balwa DB Realty - Why NRIs Invest in Commercial Real Estate

While the real estate industry is booming under developers such as Shahid Balwa of DBRealty, the commercial real estate sector is also observing the same changes. Moreover, it is no longer only the conventional form of renting, as concepts such as co-working begin to appeal to the new generation.

A group of buyers who are benefitting from this and turning their heads towards office spaces in India are NRIs. Investing in commercial office property assets helps them maximize returns, and generate fixed income while also maintaining a profile with low risk investment. IT Parks, REITS, warehouses and logistics centers are seeing investors due to the possibility of capital appreciation and increased rental yield.

The main cities that have seen a significant rise in demand, particularly Grade A spaces such as co-working spaces and malls are Mumbai, Bengaluru, Hyderabad, Pune and Delhi-NCR. Gurugram especially has become a hotspot for investments by NRIs due to its proximity to Delhi which benefit clients such as long-term corporate tenants.

An average yield of 6-10% on a commercial property is attractive as compared to a mere 1.5-3.5% on a residential property. It is a similar trend with capital appreciation as well. This growth in the commercial office market began in the year 2017 and has only benefitted due to the arrival of REITs. Another boosting factor is India’s urbanization coupled with the milieu of the new generation becoming a part of the commercial market.

Purchasing commercial office property assets allows NRI buyers to lease the property out for a long tenure. The maintenance of the property now becomes the responsibility of the tenants. India also has a liberalized foreign direct investment policy that encourages the participation of NRIs in the economy of India as domestic investors. This has also played its role in rendering the business hotspots of the country as areas where office real estate is quickly spreading its roots.

Besides, NRIs can avail loans to purchase commercial properties just like residents of India can do. But the benefit lies in the fact that there are differences in the loans between residential and commercial property loans. These include interest rates, tenure of the loan, the loan processing fee, age of the property and so on.

These are a few reasons NRIs may find it in their advantage to invest in office properties, despite the fact that they may not offer the same emotional connect as residential properties. Also, commercial real estate properties do require bigger investments as compared to residential properties and finding appropriate tenants may be a more long-drawn and complex process.

To know more about trends and updates in real estate, or to find specific information about developers and builders such as Shahid Balwa, you can do a simple internet research. If you plan on investing in a property then it is important to have important information about the market and facts such as the property rates and areas worth investing before you make a decision.