Ultra High Net Worth Individuals (UHNIs) of the country are preferring to buy residential properties in India. A report by Knight Frank suggests that they have spent almost 29% of wealth to buy primary and secondary homes in 2021. The domestic residential market is followed by international markets of the UK, the UAE and the US. A report by SURFACES REPORTER (SR).
As part of the Wealth Report 2022, Ultra HNIs (with net worth of $30 mn and above) used almost 30% of their wealth to buy residential properties.
Further, 22 per cent of UHNWIs' investable wealth was allocated towards direct purchase of commercial property (including rental property, offices etc) while 8 per cent was allocated towards indirect purchase of commercial property (including REITs, funds, etc.). Alongside, 8% of the property portfolio was kept overseas.
New Home Buying Decision
While the report suggests that globally around 21% of ultra HNIS are expected to buy home in 2022, the same is true for around 10% of India's UHNWIs.
On an average an Indian UHNWI owns 2.3 homes and 32 per cent of the Indian UHNWIs have rented out their second homes during 2021.
Shishir Baijal, Managing Director, Knight Frank India said: '' Investment in the real estate sector in India has grown in recent times especially in the wake of the pandemic as real estate was viewed as a safe and tangible investment option amidst the economic volatility.'' Further, at attractive valuations, real estate continued to drive institutional demand.
''The governing rules surrounding REITs are regularly updated to augment the scope of these investment instruments in India. Our survey indicates that the investor interest will remain stable in 2022.
''Interestingly investors showed preference towards assets such as Land Development, Healthcare, Retail and Logistics etc. ESG will continue to gain prominence as key influence in property purchase decisions in 2022,'' Baijal said.