NRI Investment in Commercial Real Estate Increasing in India

In recent months, NRIs have been increasingly investing in real estate properties in India. With the US dollar strengthening against the Indian rupee, NRIs are enjoying a favourable time investing in properties. After the pandemic, the real estate industry is healing back to health. Statistics reveal that the Indian real estate sector witnessed the inflow of USD 13.1 billion in 2021 from NRIs. The same report projected the growth in 2022 to be 12%.

A survey on commercial real estate investment reveals that 53% of NRI investors consider this segment to be a great place to channel their funds. Commercial real estate is safer and offers better returns compared to mutual funds and ETFs. In the commercial real estate sector, office spaces continue to be the most demanded asset. Next comes schools and student housing facilities. For NRIs, the average ticket size during these investments is INR 38 lakhs. This is higher compared to resident investors in the commercial real estate segment.

In corporate offices, the total number of transactions accounted for the injection of INR 1,340 crore in the third quarter of the current years. Considering the quarter-on-quarter increment, it accounts for a rise of 16.30%. In terms of share, foreign investment accounted for 67% of the investment volume of the quarter. Although the growth potential has been significant in recent times, one shouldn’t possibly overlook the government’s policies and initiatives that helped in shaping the real estate economy. The RBI and the government have also shaped the NRI investment policy in favour of the real estate sector in India.

For instance, NRIs have the power to purchase immovable property in India while adhering to the FEMA regulations. The formalities are simple, which makes it easy for them to acquire commercial properties in India. As a result, an increasing number of NRIs are purchasing properties in India. This investment pattern has also strengthened the real estate segment significantly.