The NRI effect

Non-residents act as game changers in Indian real estate’s transformationImage Credit: Supplied

Most non-resident Indians (NRIs) dream of owning property in India. But choosing the right type of unit to match one’s needs could be a tricky task. According to a survey by Sumansa Exhibitions, organiser of the Indian Property Show being held at the Dubai World Trade Centre, about 78 per cent of NRIs from the UAE are interested in buying an apartment, with the rest looking to invest in either villas or commercial properties or land in India.

“NRIs usually invest in their first home either as an initial investment, an additional investment or as a retirement plan,” says Sunil Jaiswal, President of Sumansa  exhibitions. However, the study also shows that young NRIs in the UAE are more inclined to invest in Indian property.

“The younger generation’s interest in property investment has been strengthening in the past decade,” says Jaiswal, noting that young NRIs now have a very good understanding of the financial gains associated with realty, as well as matters  concerning mortgage and even home leasing compared with their parents. “While earlier, we would see older people planning and saving to buy property, today more young people want to solidify their savings in real estate.”

According to the survey, NRIs between 18 and 35 years old account for 43 per cent of investors in Indian real estate.

Lifestyle and luxury

While they infuse fresh capital in the industry, NRIs are also helping set higher standards in Indian real estate, demanding more lifestyle amenities in addition to the usual perks, says Snehdeep Aggarwal, Founder and Chairman of Bhartiya City, a master-plan mixed-use development in Bengaluru.

“Desired amenities tend to vary with incomes, backgrounds, education, social status, etc., but we are increasingly seeing a demand for a lifestyle that is more western or cosmopolitan, though one that is grounded in India,” says Aggarwal. “The top priorities are clean and green surroundings, being close to the workplace as well as facilities for entertainment, education, shopping and socialising, world-class design and practical architecture.”

Luxury properties in India are slowly catching up with the needs of global Indians. Aggarwal says developers are tying up with the international luxury hospitality and lifestyle brands or celebrities to provide quality amenities and offer a unique lifestyle, specifically in cities such as Mumbai, Pune, Bengaluru and Delhi-NCR.

Luxury has different meanings for different individuals. “For some, it is the location, for others it may be spacious apartments with ample daylight exposure, highend fit-outs, power backup, well-equipped swimming pools, gyms, etc,” says Aggarwal. “In cities such as Mumbai, Pune and Bengaluru, a central location or one close to major employment hubs would be defined as luxury. Another definition is projects with large living spaces embellished with ultra-modern luxurious amenities.”

World-class options

Bhartiya City is designed to promote walking and cycling with amenities located close to homes. It has a seven-acre Central Park with a centre for performing arts, 3.7-million -sq-ft IT park within Bhartiya City campus and an international school. Homeowners enjoy other unique features such as kitchen gardens, an aerobics room, dance studio and authentic Italian furnishings that give the home a decidedly stylish, modern texture, explains Aggarwal.

Devang Verma, Director of Omkar Realtors and Developers, says many real estate options in India are world class when it comes to architecture, space, design, amenities, connectivity and premium services. There are helping draw the interest of NRIs, says Verma.

“Developers in India are providing spacious apartments that combine the comforts of home with hotel services, [and these are considered] premium and ultra-luxury property,” says Verma. “These homes provide the best amenities with sophisticated designs, specifications and functionalities. Currently, real estate developers are including independent swimming pools and private elevators that lead the directly to the living room, personalised Jacuzzi and spas, modern clubs with bars and games, designer gardens and much more.

“The developers are also improving the interiors by using imported stone cladding walls, Italian marble, timber wood doors, modular kitchen with German style and imported wardrobes. All this to lure NRIs.”

Other developers include health clubs, 24/7 medical help, advanced power backup technology, wide ranging security systems, sports facilities and concierge in their projects. [Properties that have] grand lobbies, private  elevators, multiple parking facilities, pet salons, welltrained housekeeping teams, iPad-controlled apartments, centralised air conditioning, and are vaastu and feng shuicompliant are sought after,” says Verma. “The location, overall look and feel of the property should breathe luxury and pride for NRIs to invest in them.”

The depreciating rupee further makes Indian real estate a lucrative investment option, and this he says is a huge factor in attracting NRI interest, in addition to the inherent desire to connect with one’s one country and the fact that it is one of the safest investment options with potential high returns.

Affordable luxury

Indian luxury homes are not limited to wealthy buyers, as the market offers a range of luxury home options for the middle-class and upper-middle-class buyers. “[For these types of property, there are also] swimming pools, clubhouses, gymnasiums, etc., but these come in the form of shared amenities,” explains Ashwinder Raj Singh, CEO of Residential Services at JLL India.

“The ‘a class above’ ethos still comes through, but residents of such affordable luxury projects are definitely not rubbing shoulders with the city’s richest and most
influential people at snob value addresses. Rather, they enjoy the company of their peers from fairly high-salaried professions, in locations where their money can buy more space.”

He adds, “Another interesting aspect of the affordable luxury segment is that developers who build such projects often shoulder the additional responsibility of introducing the whole concept of luxury to buyers who do not have any prior  exposure to it. The sale of affordable luxury property happens fairly quickly thanks to the less-exuberant price tags.”

Commercial property

The Indian government’s favourable policy regime and the country’s robust  business environment have ensured that foreign capital keeps flowing into the country, says A. R. Gupta, Senior Partner at A.R. Gupta and Associates, a legal advisor and consultancy firm. Foreign companies invest in India to take advantage of relatively lower wages, special investment privileges such as high returns and tax exemptions, among others, says Gupta.

“The government of India has recently amended the Foreign Direct Investment [FDI] policy regarding construction development sector,” says Gupta. “The amended policy, in order to attract maximum benefits, includes easing of area restriction norms, reduction of minimum capitalisation and easy exit from the project, among other norms that are [considered] investor friendly.

“To provide a boost to low-cost affordable housing, the new policy has indicated that conditions of area restriction and minimum capitalisation will not apply to cases committing 30 per cent of the project cost towards affordable housing, to provide an overall impetus to investment and development at the same time.”

Gupta says the relaxation of FDI norms, in addition to the easing of sectoral  conditions and clarification of terms used in the policy, is expected to enhance inflows in the construction sector.

“The government of India plans to further simplify rules for FDI such as increasing FDI investment limits in sectors and include more sectors in the automatic approval route, to attract more investments in the country,” says Gupta.

Source: Hina Navin, Special to PW


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