17% of interested investors in commercial real estate are above 60 years

Accountants and attorneys are showing maximum relative interest in investing in the direction of fractional ownership of Commercial Real Estate (CRE), according to Myre Capital’s ‘Myre Neo Realty Survey’, a technology-enabled fractional ownership platform for neo real estate. Other segments of the investor and user base include doctors, IT professionals, entrepreneurs, and other business owners. These investors prefer fixed income options backed by a hard asset and have begun to appreciate Fractional CRE’s favorable risk-return profile and the end-to-end management provided by fractional ownership platforms.

Myre Capital conducted a nationwide Myre Neo-Realty survey that gathered responses from over 1,500 registered users and investors. According to the survey, 68 percent of interested CRE investors are in the 36-60 age group, 15 percent between 25-35 years and 17 percent of investors over 60 years old.

Seniors show interest in CRE

Although investors 60 and over have traditionally been reluctant to invest in alternative investments, the trend is changing. CRE enables these investors to receive a collateral-backed steady monthly inflow with the likelihood of additional benefit from annual capital appreciation realized over time. This allows investors to realize additional gains through capital appreciation at the time of the exit.

The survey highlights some key needs and changes that investors are demanding of traditional commercial real estate investments, such as easier access to opportunities (33 percent), increased transparency (20 percent), data symmetry (21 percent) and streamlining of processes ( 24.). Percent).

Founder and CEO of Myre Capital, Aryaman Vir said: “There has been fractional investment in India for a long time, but in a disorganized way. The most common challenges such as large ticket sizes, operational tasks, lengthy and complicated documentation, lack of specialist knowledge and trust are solved by our platform in order to make this asset class more integrative and accessible. We believe that as the regulations become more convenient, investors will be able to trust CREs and be able to derive great returns from promising real estate opportunities in the country. ”

Investment preferences

The report also suggests that investors’ investment preferences vary with age. Young investors are prepared to take risks and returns and are ready to diversify their real estate investments geographically. Older investors prefer a low risk investment option with secured stable fixed income securities as many of them are retired and do not have a regular source of income.

Since partial ownership opportunities are backed by an underlying hard asset, the risk profile fits well with the goals of conservative investors. Such opportunities are also preferred by younger investors looking for double-digit annualized returns – considering annual capital growth, such investors can earn 17 to 25 percent IRR without compromising their risk.

CRE has greater participation from women

As India’s demographics shift towards a more equitable gender distribution, CRE has seen increased participation by female investors. The survey shows that 41 percent of the people surveyed were female users and investors. This gender distribution is relatively fairer than most investment options.

In the short term, investors have cited rental income, redistribution of realized profits in the equity markets, diversification of capital, and effective monthly cash flow alternatives as driving factors behind their interest in Fractional CRE. On the flip side, the list of long-term goals for the same investors includes commercial real estate portfolio creation, wealth creation, capital appreciation, and capital preservation.

The survey shows that cities are gaining in importance among other key markets. Bangalore is taking the lead with 27 percent of investors showing interest in partial ownership, followed by 21 percent showing interest in Punes real estate. The survey also shows that India is seen by the NRI community as an emerging market for investment, with nearly a third of respondents from countries like the US, UAE, UK, Denmark, Nigeria, Australia, etc.

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Posted on: Monday, August 23, 2021 1:08 pm IST