Bengaluru crowned top pick for NRI investments: NoBroker

The Silicon Valley of India continues to remain the favourite of non-resident Indians who are looking to invest in the Indian real estate market, according to a report released by proptech unicorn NoBroker on Tuesday.

Bolstered by a cosmopolitan culture, world-class educational institutions and a thriving startup ecosystem, the rental yield in Bengaluru has risen substantially, making it a good investment destination, the report reasoned.

"Bengaluru is the top choice for NRIs as it is a stable market that is rightly priced and growing at a right pace," said BCD Group Managing Director Angad Bedi, adding that the city has a huge potential for horizontal expansion and with several emerging micro markets the return on investment is also attractive.

"What also puts Bengaluru on a different pedestal is its highly vibrant ecosystem that is attracting businesses, investors and talent from across the world," said Vaishnavi Group Director Darshan Govindaraju. Due to these factors the demand for quality housing is on the rise, resulting in consistent price appreciation and rental uptick, he added.

Mumbai came in as a close second, with a dynamic real estate offering comprising a mix of commercial and residential luxury properties.

Attracted by favourable government policies for foreign investment, the non-resident Indian diaspora, which accounted for approximately 10% of the total investments into the sector in 2019-20, is expected to contribute a substantial 17% by 2025, the report highlighted. 

"The interest of NRI investors which was earlier limited to a particular asset class, is gradually expanding across brackets, including residential, commercial and emerging classes like data centers, flex offices and warehousing," Bedi remarked.

While 57% of the prospective NRI property buyers surveyed by NoBroker said they were looking to purchase property for self use, the remaining 43% revealed their intent to make a purchase for their family residing in India. 

A striking 46% of those surveyed are also turning to real estate websites while exploring property options for investment in the country. Other demand trends include an increasing ask for spacious 3BHKs, exceeding Rs 1 crore in value, in gated societies.

The top three geographies for NRI contributions to Indian realty include the United Arab Emirates, the US and Singapore.

About 82% of NRI buyers cited lack of information and transparency as major challenges when navigating the Indian real estate market, often leaving them to the mercy of third party information providers. 

Interestingly, 52% of the existing property owners in the NRI bracket showed inclination towards professional property management solutions to oversee their realty assets, including tasks such as finding a tenant, property inspection, rent collection and administrative duties.

On Bengaluru, Bedi said: "While the city’s real estate sector is growing exponentially, the need of the hour is extensive infrastructural upgrades that will open new doors for the sector and the city as a whole.”