A beginner’s guide to investing in commercial real estate in India
The commercial real estate asset class in India has become one of the favoured investment avenues for global institutional investors, often referred to as the “Blue Eyed Boy” of private equity funds. Commercial real estate is one of the asset classes that is closely correlated to the underlying country macro-conditions – considering the Indian Growth Story, the returns have been commensurate presenting a compelling risk-adjusted investment proposition. Through innovation and technology, this asset class has largely been democratised, providing retail investors with unprecedented access.
Alternative investments, once the domain of UHNIs (Ultra High Net-Worth Individuals) and institutional elites, have increasingly seen increasing participation and market share from retail investors and high salaried professionals.
After significant market crashes like the 2008 housing crisis, tech bubble crash, and COVID-19 crash, the value and importance of alternative investments becomes clearer. These events underscore the need for diversification beyond traditional assets. Alternative investments offer non-correlation, stable returns, potential for alpha, and serve as an effective hedge against inflation.
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This trend is not only confined to India, but can be seen on a larger global platform. The Blackrock Report indicates a global uptick: from just 5% in 1995, alternative investments grew to 26.0% by 2019. Tech-driven platforms have democratised access to these assets in the past decade, allowing more average individuals to participate.
Supporting this, SEBI reports from December 2021 showed alternative investment funds growing by 38%, reaching over 6 lakh crores,
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