WiseX Survey: Growing Interest in Real Estate Investments Among HNIs

The 2024 edition of the Neo-Realty survey by WiseX, India’s leading Neo-realty investments platform, revealed that 60% of overall investors (out of 6578 respondents) and 64% of High Networth Individuals (2174 HNI respondents) prefer the fractional ownership model to invest in Commercial Real Estate (CRE) in India. Fractional ownership has emerged as a new investment model in India over the last couple of years, and CRE is a growing asset class that allows investors to generate steady passive rental income for the long term along with capital appreciation. Substantiating this, a recent report by Knight Frank stated that the market size of fractional ownership properties in India has grown by 65% from 2020 and is soon to reach USD 8.9 billion by 2025.

Regulatory Support Boosts Fractional Ownership Confidence

Recent amendments in the regulations of REITs to include SM REITs also add to the confluence on the rise of fractional ownership. The WiseX survey of affluent investors shows that 60% of investors who haven’t previously invested in Fractional Ownership believe regulatory support from SEBI has bolstered their confidence in Fractional Ownership investments. Although investing in commercial real estate has always been accessible, enhanced regulatory oversight has further solidified their trust.

The survey suggests that Bengaluru is the top preferred location for HNI investors (~31%) to make fractional ownership investments, followed by Pune (~24%); Mumbai (~22%) and Delhi NCR (~13%). WiseX’s survey also revealed that 61% of investors found equities to be the most rewarding in the last financial year, followed by innovative, new-age real estate investments like REITs and fractional ownership (45%), mutual funds (39%) and traditional real estate (35%). Moreover, 69% of HNIs are planning to increase their investments in real estate opportunities, demonstrating a bullish outlook on the sector.

The survey also indicates that real fractional ownership investments through tech platforms offer a great track record of timely payments which makes it a foremost reason for high investment in these models. Of the investors who haven’t made a Fractional Ownership investment thus far, the biggest apprehension turned out to be liquidity concerns for about 30% investors. The survey revealed that the majority of investors favour real estate investments with a medium-term perspective of 1-3 years (20%) & 4-6 years (55%).

Speaking about the Neo-Realty survey, Mr. Aryaman Vir, CEO of WiseX, said, “Over the last decade, the investment landscape in India has undergone a transformation in demographics, technological progress, and there has been growth in individual disposable incomes. Investors are now increasingly open to exploring new investment options for better returns. Our 2024 edition of the Neo-realty survey provides insights into the alternative investment space and industry trends, highlighting how affluent individuals across various income levels are shaping their financial strategies. The recent SEBI guidelines on SM REITs enhances layers of liquidity and safety to investing in real estate, and also makes it highly accessible to investors.”

He added, “Despite an inclination towards equities & mutual funds, there is growing evidence of interest in investing in real-estate investments amongst investors as it is a stable asset class. As a leader in the fractional ownership industry, it is heartening to see the sentiment towards fractional ownership growing positively over the past 3 to 4 years. While Bengaluru, Pune, Mumbai & Delhi NCR are the leading markets for real estate investments in India, we continue to witness high demand for real estate investments from other tier 1 & 2 cities as well. We believe the recent SEBI approval on regularizing fractional ownership framework, along with reducing the minimum threshold of investment to INR 10 lakhs will further help in democratizing real estate—a traditional asset class—to more investors.”