The Indian real estate market is considered as one of the beneficial investment for NRIs. The challenge for NRIs is to look for a property to invest. On one hand, with rupee touching all-time lows against the dollar, investment in Indian real estate appears to be a great time to remit funds. However, on the other hand, with growth story looking bleak, the prospect for high returns seems an uphill task.
With slowing down of the investment in the residential sector, NRIs are now eyeing to invest in the commercial property sector of India. The returns from the residential assets are no longer meeting the expectations of NRIs investors thus, moving from residential sectors to commercial sectors as the real estate sector is seen as a steady asset appreciation in India.
Let us understand why NRIs should invest in commercial or real estate sector of India?
- Due to urbanization, the commercial market in India has been performing reasonably well. The Indian commercial sector is experiencing a new level of growth, which is backed by strong economic fundamentals.
- The rental yield from investing in the commercial sector is much higher than investing in the residential sector.
- The recent turnaround in the international currency exchange has proven out to be beneficial for NRIs. Rupee rates plummeted below record levels in the past few decades by crossing the 71 INR per dollar. This served as a great opportunity for the prospecting NRIs who are eyeing to invest in real estate sector in India.
- Ease of FDI norms and general government focus on housing also adds to the confidence of an NRI investor. This adds more transparency to real estate transactions. A higher inflow of capital serves as a reason for NRIs investing in the commercial sector if India.
- The introduction of RERA has brought more transparency and accountability in the working system and the increasing rental has made people think about investing in the commercial sector. NRI investors who are investing in the commercial sector expect to have capital appreciation soon.
- NRIs who invest in the residential sector in India are worried about the maintenance of the property after purchasing, thus, they turn towards the commercial sector for better hassle free deal. The commercial property could be let out/rented at lease for a longer period of time.
- One of the reasons why NRIs eye upon the commercial sector of India to invest is because they can avail loans and claim tax benefits under Section 24 and Section 80.
- With fast and ever-evolving work culture in India, regular office spaces will give way to more hybrid or co-working spaces. The booming start-up culture in India provides the NRIs with a great opportunity to invest their money into commercial sectors and lease out the property to the co-working spaces. This creates an upward tangent in cost efficiency, productivity and employee retention.
- Cities like Bengaluru, Mumbai, Chennai, Pune, Hyderabad, and Delhi- NCR are highly recommended for NRIs investors. In Delhi- NCR, Gurugram has become an investment destination for NRIs to invest in the commercial sector. This is mainly because of the soaring property prices, locality, the world-class commercial set up, infrastructure and good connectivity.
It is concluded that NRIs’ investment in the commercial real estate of India is bound to increase in the coming time especially when the developers are offering projects of international standards.
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