Investing in Land for Rental Yields: A Lucrative Opportunity
Investing in land and renting it out can generate 10 times higher yield than investing in ready apartments, according to a report by Colliers India.
The report, titled “Top Investment Corridors in India,” found that the key factors driving property appreciation across the country are proximity to the city center, upcoming infrastructure, social amenities, tourist attractions, and affordability.
The real estate sector is continuing to gain traction, coupled with acceleration in infrastructure developments. Micro-markets in India across major metropolitan cities are evolving as key investment corridors.
The report also found that infrastructure projects serve as a conduit for investments and developments in real estate. Several factors such as employment, regional connectivity, accessibility to healthcare and educational facilities, safety and security, environmental sustainability, good governance, and socio-political stability are key growth drivers for investments.
The micro-markets close to financial and industrial hubs in major cities of India are anticipated to gain more attraction in the upcoming years. In fact, it is observed that the demand for villas, farmhouses, plots, and land across key destinations close to nature and proximity to metro cities have increased 2X post Covid-19.
Some of the key investment corridors across India include:
- Maharashtra: Vasai Virar, Bhiwandi, and Neral-Matheran
- Gujarat: Sanand Nal Sarovar corridor
- Chennai: ECR
- Hyderabad: Medchal
- Kolkata: New Town and Rajarhat
These corridors offer ample amount of land availability, increased traction in tourism and uptake in infrastructure. They are emerging as destination investments with an average annual rental yield between 2.5 – 4 percent and price appreciation for land between 6 – 8 percent annually.
Additionally, proposed infrastructure transit projects like the Delhi-Mumbai Industrial Corridor and the Delhi-Ahmedabad High-Speed Rail Corridor in Ahmedabad; and the proposed industrial corridors along the Nagpur and Delhi- Hyderabad Highway will be a boost for the real estate sector.
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