News: Millennial investors increasingly investing in Indian commercial real estate : Survey-30-05-2022
Millennial investors are increasingly investing in Indian commercial real estate as 53% of NRI investors are millennials, according to Neo-realty survey by MYRE Capital which assessed the investment appetite of around 5000 NRIs across 13 countries.
Commercial Real Estate (CRE) growth drivers for NRI investors include passive income for family, portfolio diversification, lack of other safe alternatives, tax-efficient returns among others. Properties in Bengaluru, Mumbai, Pune are the top three investment hubs for NRIs wherein office spaces remain the most sought-after asset and school spaces emerge as a new CRE asset.
According to the survey, 53% of the NRI investors choose CRE as their favourite investment vehicle over ETFs (21%), Mutual Funds (19%), with the average ticket size for an NRI being higher, at INR 38 lakh as compared to a resident CRE investor.
Interestingly, 82% of the NRI investors did not have any previous investments in India, owing to the accessibility issues, lack of transparency and trust.
“We conducted this survey to understand if the new-age investor faced the same entry barrier as the GenX investor. We were pleasantly surprised to find that investors are now keen on investing in assets such as office space, student housing, and schools. 40% of our NRI user base are women, we believe increasing awareness and access to Grade-A properties will make more NRIs explore this asset class,” said Vir, MYRE Capital’s Founder and CEO.
Originally hailing from Bengaluru and Mumbai (a combined 45% of the respondents), investors have shown a geographical interest in investing in cities they belonged to. Bengaluru has been home to India’s largest IT corridor providing office spaces for some of the leading MNCs - given the pandemic, globally firms are accelerating the transition of processes to a more digital oriented approach.
Bengaluru being the IT/ITES capital of the world, has witnessed continued increasing demand from MNC’s and has been able to sustain market growth whilst keeping vacancies in single digits. “Since millennials and high salaried senior professionals comprise a large subset of these NRI investors, there is a natural inclination to invest in fractional CRE which is very easy to manage versus any other form of traditional real estate ownership,” Vir said.
The survey also reveals that there continue to be challenges in investing in CRE for NRI investors (property management, tenant management, legal diligence, asset identification, asset management, etc.).
“This is the gap that we are trying to bridge using technology and a futuristic investment platform. Our vision is to build a platform focused on expertise, transparency, and trust for investors to facilitate real estate investments in institutional grade opportunities - this will enable us to democratize a traditionally antiquated asset class and hence reposition Indian CRE on a global platform,” he added
MYRE Capital has launched five properties in the last 12 months, and has aggregated an assets under management in excess of INR 175Cr. MYRE has a user base of 30,000+ users and investments spread across Pune, NCR, Bangalore, and Mumbai. The users include 37% NRI investors from 16+ Countries.
