commercial real estate: 68% of investors interested in commercial real estate in the 36-60 age group
Chartered accountants and lawyers show the maximum relative interest in investments in fractional ownership of commercial real estate, while other segments of the investor and user base include physicians, health professionals. IT, entrepreneurs and other business owners.
These investors prefer fixed income options backed by hard assets and have started to appreciate the favorable risk-return profile of fractional CRE and the end-to-end management provided by fractional ownership platforms.
âFractional investing has been around for a long time in India, but in an unorganized way. Even now, investors are limiting themselves to residential real estate as their only investment choice and we want them to know CRE as an effective avenue, âsaid MYRE Capital Founder and CEO Aryaman Vir.
The survey was conducted by collecting responses from over 1,500 registered high-priced users and investors.
According to the survey, 68% of investors interested in Commercial Real Estate (CRE) are in the 36-60 age group. 15% of interested investors are between 25 and 35 years old, while 17% of interested investors belong to the age group above 60 years.
“The most common challenges such as large ticket sizes, operational tasks, long and complicated documentation, lack of expertise and trust are addressed by our platform to make it a more inclusive asset class and accessible, âVir said.
Although investors aged 60 and over have traditionally been opposed to alternative investments, the trend is changing. CRE allows these investors to earn a regular monthly inflow backed by guarantees with the probability of an additional benefit from the annual capital appreciation achieved over time. This allows investors to realize additional gains at the time of exit due to capital appreciation.
The survey highlights some key needs and changes required by investors in the traditional form of investing in CRE, such as easier access to opportunities (33%), increased transparency (20%), data symmetry (21%), and streamlining of processes (24%). Fractional Ownership Platforms are addressing these issues to bring more trust and transparency to the Indian CRE market.
“We believe that with the implementation of regulations, investors will be more comfortable trusting CREs and will be able to derive excellent returns on promising real estate opportunities in the country,” he added. .
The report also states that investors’ investment preferences vary with age. Young investors have an appetite for high risk and high return and are ready to geographically diversify their real estate investments.
Older investors prefer a low risk investment option with a stable fixed income backed by collateral as many of them are retired and do not have a regular source of income. CRE is a unique asset class because it meets the needs of both segments. Individuals looking for a stable fixed income source can achieve relatively high returns through monthly rental income.
Since fractional ownership opportunities are secured by a hard underlying asset, the risk profile fits well with the goals of conservative investors. Such opportunities are also preferred by young investors looking for double-digit annualized returns – taking into account annual capital appreciation, these investors can earn 17% -25% IRR without having to compromise on their exposure to the market. risk.
As demographics in India move towards a more equitable distribution of the sexes, CRE has observed an increased participation of women investors. The survey reveals that of all the people questioned, 41% were users and investors. This gender distribution is relatively more equitable than most investment avenues.
The survey shows that cities are growing in popularity among other key markets. Bangalore takes the lead with 27% of investors showing interest in fractional ownership, followed by 21% interested in Pune real estate. The survey also identifies that India is seen as an emerging market for investment by the NRI community with almost a third of respondents coming from countries like the United States, United Arab Emirates, United Kingdom, Denmark, Nigeria and Australia, among others.