Investing in land and monetising it in rental format gives 10 times higher yield than ready apartments, a report published by Colliers’ Advisory Services said.
The report titled `Top Investment Corridors in India’ pointed out that proximity to the city centre, upcoming infrastructure, social amenities, tourist attractions and affordability are the key triggers for property appreciation across the country.
The real estate sector continues to get traction, coupled with acceleration in infrastructure developments. Micro-markets in India across major metropolitan cities are evolving as key investment corridors, it added.
"Better infrastructure, affordability, higher rental yield, the scope of capital appreciation, tourist attractions, and proximity to the city centre are the key parameters while looking for any investments. These factors, together with the rising popularity of remote work and flexible work options, have contributed to making tourism destinations in India more attractive to investors," Swapnil Anil, Executive Director and Head of Advisory Services, Colliers India said.
Infrastructure, proximity to cities boosting real estate
The report added that infrastructure projects serve as a conduit for investments and developments in real estate. Several factors such as employment, regional connectivity, accessibility to healthcare and educational facilities, safety and security, environmental sustainability, good governance, and socio-political stability are key growth drivers for investments.
"The micro-markets close to financial and industrial hubs in major cities of India are anticipated to gain more attraction in the upcoming years. In fact, it is observed that the demand for villas, farmhouses, plots, and land across key destinations close to nature and proximity to metro cities have increased 2X post Covid-19,” Umakanth Y, Senior Director & Head of Delivery, Advisory Services, Colliers India said.
Growing real estate corridors across India
Locations in Maharashtra like Vasai Virar, Bhiwandi, and Neral-Matheran, are the key hotspots --- the report found --- led by the availability of non-agricultural large land parcels along with key upcoming infrastructure developments and the presence of branded developers.
Additionally, Maharashtra's Neral-Matheran corridor has emerged as a major hotspot among investors due to the presence of branded developers with sizeable real estate projects, proximity to the city centre, and well-established social amenities like Bhimashankar Wildlife Sanctuary, ND Film Studio, Neral-Matheran toy train and Rambag point.
"The Neral-Matheran micro-market is considered as one of the key investment regions with an average annual rental yield of 15 percent for holiday homes and is expected to achieve five times return on land investments in the next 10 years," the report said.
The tourism and industrial hub of Gujarat – Sanand Nal Sarovar corridor, ECR in Chennai, Medchal in Hyderabad, New Town and Rajarhat in Kolkata are also attracting investments.
The report said these corridors with ample amount of land availability, increased traction in tourism and uptake in infrastructure are emerging as destination investments with an average annual rental yield between 2.5 - 4 percent and price appreciation for land between 6 - 8 percent annually.
Additionally, the report mentioned that proposed infrastructure transit projects like the Delhi-Mumbai Industrial Corridor and the Delhi-Ahmedabad High-Speed Rail Corridor in Ahmedabad; and the proposed industrial corridors along the Nagpur and Delhi- Hyderabad Highway will be a boost for the real estate sector.
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