India’s commercial office property asset class presents an I profitable alternative for NRI investors looking at maximizing returns and generating fixed income while simultaneously maintaining a low-risk investment profile. The attractiveness of good capital appreciation, as well as rental yield, has increased NRI inventor demand for Grade A offices, IT parks, logistics centres - and now REITs as well.
A good commercial property can give an average rental yield of 6-10% and the current rental yield from residential property is a mere 1.5-3.5%. The same growth range holds true for capital appreciation.
The upsurge of India’s commercial office market began in 2017 and has been further boosted by the arrival of REITs. Commercial real estate in India is driven by strong economic fundamentals, demand for quality Grade A office space, relatively affordable rents, and the new co-working office space trend in key markets.
The other key potentiating factors driving demand, especially for Grade A office spaces, are India’s rapid urbanization and the increasing share of millennials.
Commercial Supply & Demand Dynamics
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