Once a non-preferred investment market among NRIs, the Indian commercial realty market is now emerging as a favorable investment option to buy commercial property and earn good Returns on Investment. Reason attractive economic policies, opening up of Foreign Direct Investment (FDI), and rapid urbanization call upon NRIs to focus more on the commercial real estate India market than the residential one. Other advantages include high rental yield, long lease tenure, etc.
Also, stringent policies like – RERA and GST have improved transparency, making the Indian commercial market investor-friendly. Take a look at various factors that are making the commercial real estate India market a hotbed for real estate investments:
Leasing Assistance by Developers
While planning to invest in commercial real estate India, an NRI gets various leasing assistance offers from the real-estate developers. For example, some developers offer a standard assured lease for 9 years and a lock-in period of 3 years.
However, these days to woo NRIs, several renowned developers have increased the assured lease tenure by 21 years along with a lock-in period of 7 years to buy commercial property in India.
Higher Rentals In Commercial Real Estate India
As compared to residential property, commercial real estate India gives more benefits to NRIs when it comes to investment. Leasing commercial property yields more rent to the owner than a residential unit. For instance, a well-developed commercial property offers an average rental yield of 6-10 percent. On the contrary, in residential units, the average rental is only 1.5 to 3.5%.
Commercial properties also offer better-assured returns, i.e., capital appreciation till possession that varies from 10-12%.
Low Maintenance Cost In Commercial Real Estate India
Another advantage of commercial property investment is that it needs less maintenance than a housing unit. Unlike a residential tenant, a commercial property tenant doesn’t leave a place before 10-20 years. So, it’s obvious that the company will only bear the maintenance cost and not the owner. On the other hand, in the case of a residential unit, the maximum tenure of a tenant is 1-2 years, so after every exit, the house needs to be maintained, and here, the cost is bored the NRI owner. Also, you need a caretaker to look after the property, and you only have to bear the expense.
Hence, commercial property investment gives NRI owners a feeling of relaxation and stable income generation.
Loan Facilities and Tax Benefits
To woo NRI investors, the government has launched many investor-friendly loan schemes that call upon them to invest in commercial real estate India. With the help of private and nationalized banks, an NRI can easily avail of a loan by linking all the documents and title papers that the banks can further verify to buy property in India.
Apart from easier availability of loans, an NRI can also enjoy tax benefits under Section 24 and Section 80C of the Income Tax Act. Here, an NRI has to pay a higher interest rate, and the loan tenure also ranges between 5-20 years when they buy or invest in commercial real estate India.
Prominent Cities to Invest In Commercial Real Estate India
Commercial property investment in India has flourished to a large extent in the past few years. Cities like Bengaluru, Chennai, Hyderabad, Pune, Gurgaon, and Mumbai have witnessed a steep jump in the launch of new commercial projects offering higher capital and rentals.
In the South, Bengaluru has seen major traction in the demand and supply of commercial units. The reason behind this is increasing startup culture, coworking spaces, and popularity among leading global MNCs for setting up their base in India.
In the North, Gurgaon has maintained this type of momentum. The city hosts around 250 fortune 500 companies and many others are on the list of commercial real estate India.
Future on NRI Investment in Commercial Real Estate India
Experts suggest that the NRI investment in the Indian Commercial market will further increase in the coming few years. With strong government policies, FDI investment, and other benefits, NRIs investment can change the face of the complete commercial realty market and India is emerging as one of the favorable countries to buy commercial property.