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The real estate industry in India has undergone a revolution in recent years. The huge ROI in this sector has attracted foreign investors who are trying to collaborate with the local realtors in India to deal with commercial property. Most of these investors are interested in buying Grade A property that they can rent out for commercial purposes. Evidently, Global investment in India, in the real estate sector, is on the rise. As a large section of the NRIs do not possess the necessary domain knowledge in the Indian real estate industry; they need to collaborate with the local realtors in the country. Apart from this, it is difficult for them to be physically present in the country to do the dealings. With the help of local agents, they can acquire high-end property that delivers good returns on sale. Another reason behind the increasing non-resident Indian investment in the real estate sector is the high returns on sale. In developed countries, the margin of profit is lower as compared to that in India. Therefore, it is more beneficial for them to invest in property in India than other countries where they settle. Stringent business norms in these countries also prevent them from investing in those properties.
Companies like Brookfield, GIC and Blackstone have already acquired large commercial properties in India, collaborating with the local agents. They lease out these properties to blue-chip companies and get high returns in the upcoming years. One of the greatest advantages of tie-ups with the local agents is that the investors can get the value of their experience when they invest in the realty sector. According to a survey, the investments of NRIs in commercial properties show emerging trends in cities like New Delhi, Bangalore and Mumbai. This survey was based on the opinion of 400 developers and fund managers across Asia. The developers are able to attract funds from these investors who have good capitalization rate for these assets. This indicates large amounts of investment and more expensive deals. On the other hand, certain investors are willing to develop their own assets, in case they find the right partners. Indian real estate agents, who can collaborate with these investors, can reap the benefits of the booming real estate market. In India, the key hurdle is not the capital, but finding the right partner. With the right collaboration, NRI Investments in Commercial properties are likely to further increase in the upcoming years.
The Allianz Group, a recognized asset management & insurance group, entered into a partnership with the Shapoorji Pallonji Group. Their target is to acquire commercial properties in India and invest in these areas to get high returns. The partnership is likely to help them with an equity of around USD 5500 million. The commercial and logistics sector is the key area of attraction for the foreign investors. Evidently, the Real Estate Investment in India is increasing as a result of these partnerships and collaborations. Especially, commercial property in the country is in high demand. NRIs are aiming to partner with local realtors while investing in these properties.
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