While real estate has been one of the preferred investment segments for non-resident Indians (NRIs), a new report has claimed that millennial NRIs are keen on investing in the commercial segment. The report claimed that 53 percent of NRI investors are millennials, and Bengaluru is the top choice for NRI investment.
The Neo-realty Survey by MYRE Capital claimed to have assessed the investment appetite of around 5,000 NRIs across 13 countries. It noted that growth drivers among NRI investors for commercial real estate (CRE) include passive income for family, portfolio diversification, lack of other safe alternatives, and tax-efficient returns, among others.
While 22 per cent of the NRIs preferred Bengaluru for investment, 18 per cent favoured Mumbai, 17 per cent Pune, 9 per cent Chennai, and 8 per cent Delhi. The report also indicated that 44 per cent opted for investment in office spaces, 23 per cent preferred schools, 20 per cent retail, and 13 per cent warehouses.
According to the survey, around 53 per cent of the NRI investors choose CRE as their favourite investment vehicle over ETFs (21 per cent), mutual funds (19 per cent), etc, while the average ticket size was Rs 38 lakh.
The report also claimed that while 82 per cent of the NRI investors did not have any previous investments in India due to lack of transparency and trust, they invested for the first time, encouraged by enhanced transparency, competitive returns, tech-enabled experience (including virtual tours of the property, digital onboarding and performance tracking, real-time updates, etc.), and end-to-end asset management.
NRIs originally hailing from Bengaluru and Mumbai (45 per cent of the respondents) have shown a geographical interest in investing in cities they belonged to. Bengaluru being the IT/ITeS capital of the world has witnessed continued increasing demand from MNCs, said the report.