Budget 2021-22::Need Of Reforms To Boost Investments In Commercial Real Estate

Beth McCandry

The government should also encourage prop-tech businesses by providing guaranteed credit.

Commercial office real estate is a thriving investment class in India. Alongside political reforms, institutional investments, foreign partnerships and the growth of the IT-ITeS (Information Technology-Information Technology-Enabled Services Sector), the demand for prime office real estate has become so attractive that top global investors are placing big bets despite concerns about the Work from home existed.

“With several notable government initiatives like Make in India, reforms like RERA and GST, as well as the Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT), India is expected to continue its growth in the commercial segment in 2021 and 2021 – thanks to more secured and lucrative Returns on Investments, ”said Rajesh Binner, Founder and CEO of YieldAsset Real Estate Tech Pvt Ltd, a prop tech company. “In order to continue to fuel the growth of commercial office real estate in the country, we expect the government to investigate some of the top concerns to help boost the economy. Stamp duty needs to be reduced, and while Maharashtra has taken the lead, other states would like to see it implemented. GST incurred in the construction of real estate to be rented should be approved as advance credit against the GST for rent claims. The GST to TDR and the joint development of commercial real estate could also be explored. We hope the budget will provide more funding for IT infrastructure spending to digitize land registry entries in urban areas. “

Mr Binner said the government should also promote prop-tech companies by providing guaranteed credit to build the blockchain implementation of real estate records. “With the growth of startups likely to have a positive impact on commercial real estate, it is important for the government to also consider the concerns of these prop-tech and part-investment startups,” he said.

With the commercial segment expected to grow in the post-pandemic period, fractional ownership is one of the additional options for developers to expand the market and maintain liquidity through the sale of commercial properties.

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He said while partial investment opens up new opportunities for the office developers, it also provides an asset class for smaller investors that was otherwise only available to high net worth individuals (HNIs), family offices and institutions due to the ticket size for owning large office space .

In the US and Europe, a portion of real estate ownership was predominant that few prop-tech companies have made possible. This concept is now gaining acceptance in India, he adds.

“For small home and second home investors, this is one of the best ways to invest and own premium class A commercial real estate and generate stable long-term income. Fractional investing also allows you to diversify by investing in multiple properties with smaller investments, ”Binner said.