We anticipate measures that protect and propel real estate`s growth as an alternative investment asset class Says Raj S. Inamdar, TriVeda Capital
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Below is quote on Budget 2023 expectation by Real Estate Sector from Raj S. Inamdar, Partner at TriVeda Capital
Indian real estate is rapidly emerging as the asset class of choice for investors, driven by strong sales growth, increased rental yields, extensive infrastructure projects and upward revisions in India’s GDP growth forecasts.
Investors are recognizing real estate's vast untapped growth potential in comparison to asset classes such as stocks, bonds, deposits, gold and others. Since public listings are effected by high volatility, and bonds & deposits eroded by inflationary pressures, investors are steadily increasing their allocations to the inflation-protected and relatively stable real estate segment. Furthermore, sales in the residential real estate segment have experienced stellar double-digit growth (India's top eight property markets witnessed sales of over 3.12 lakh units in 2022, resulting in high 34% year-over-year growth). Private equity investments in real estate have also increased year-over-year by 20% in 2022, for a total of USD $4.9 billion. Indian real estate's growth trajectory over the next ten years is therefore based upon a solid post-COVID foundation.
In today's real estate market, a regulated investment platform such as a real estate AIF is a highly attractive option for NRIs and HNIs, which enables investors to participate in India's phenomenal real estate growth story in a risk-mitigated manner. To put things in perspective, the AIF category has grown at a stunning 50% CAGR during financial year 2022, and commitments for AIFs were Rs 6.94 lakh crores by June 2022. Considering this, in the upcoming national budget, we anticipate measures that protect and propel real estate's growth as an alternative investment asset class. We would like to see the introduction of policies that simplify regulatory processes for NRIs to invest in real estate AIFs. Furthermore, tax concessions on interest income for NRIs investing in category 2 AIFs will further improve inflows in this asset class. We also look forward to measures that reduce timelines for real estate project approvals in India."
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