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India HNIs Pour Cash Into Real Estate
23 Dec
Summary
- Real estate now forms 30-35% of HNI wealth, excluding primary residences.
- 62% of Indian HNIs plan luxury property investments within 24 months.
- HNIs seek steady cash flows, favouring grade-A offices and retail yields.
Indian high-net-worth individuals (HNIs) are substantially boosting their investments in real estate, with these tangible assets now representing 30-35% of their portfolios. This shift prioritizes wealth preservation and a hedge against market volatility. Industry forecasts indicate a strong future trend, with 62% of HNIs planning luxury residential property acquisitions in the upcoming 24 months.
The focus for affluent buyers is evolving beyond mere size and price, emphasizing lifestyle and long-term wealth preservation. While luxury homes remain sought after, there's a growing preference for assets offering visible income streams. This includes well-managed properties with reliable cash flows, where tenant credibility and lease terms are paramount considerations.
Rental income is emerging as a key investment driver, pushing HNIs towards assets like grade-A offices and retail spaces, which offer yields of 6-10%, considerably higher than residential properties' 2-4%. Pre-leased commercial properties are particularly attractive due to their stable, high returns and long-term leases, minimising vacancy risks.
