The real estate market has historically been the asset class that created the most wealth for investors but the need for specialised investment know-how and large capital investment has restricted the asset class – particularly commercial real estate investing – to institutional investors and ultra high net worth individuals. One of India’s largest tech-enabled commercial property investment platform, Property Share, is looking to change this and drive the transformation in real estate investment landscape by making the asset class more accessible to ordinary investors with a significantly lower investment threshold. The company has democratised access to commercial real estate investments, making it more affordable and feasible for retail investors to participate.
In a conversation with Economic Times, Property Share Co-founder and CEO Kunal Moktan elaborates on how the platform’s technological advancements enable investors to remotely access institutional-level analysis, detailed property information, and ultimately engage in online real estate investment through intuitive applications.
Watch Kunal Moktan, Co-founder and CEO, Property Share in conversation with Miloni Bhatt, Editor – Digital Broadcast, EconomicTimes.com
Rise of Commercial Real Estate in India The commercial real estate sector in India has experienced a significant transformation over the past couple of decades. The influx of US and European multinational companies has driven the growth of the commercial office market.“It was only in the early 2000s that a lot of the US multinationals started coming to India first to start call centres… and then more of higher backend office processing and research and development. The Microsofts, Apples, and Ciscos of the world came to cities like Bangalore, Pune, Noida, and Gurugram, and set up these large tech centres. So that’s where there was something to buy and there was a steady stream of leasing and demand that kind of came into the country,” said Moktan.This growth in the commercial real estate sector was particularly pronounced between 2007 and 2010 when large institutional private equity funds entered the Indian market. The establishment of global centres by companies like Cisco and Goldman Sachs in Indian tech hubs like Bangalore and Hyderabad further fueled demand for commercial spaces. This trend has continued, with companies recognising the cost-saving advantages of operating in India. Moktan further emphasised that this influx of demand is what helped propel the commercial real estate market’s impressive performance in the country. Accessibility and REIT Regulations Historically, commercial real estate investment in India was primarily the domain of institutional investors. An important factor in opening up the sector to retail investors has been the REIT (Real Estate Investment Trust) regulations introduced in 2014-15, which made commercial real estate investment more accessible to smaller, less sophisticated investors, noted Moktan. With the launch of the first REIT listing in 2018, it became possible for investors to own a fraction of commercial real estate through the REIT route. Property Share has also played a transformative role in the commercial real estate investment landscape. Since it was founded in 2015, Property Share has sought to make commercial real estate investment accessible to a broader audience. The platform capitalises on the growing comfort with online transactions and the widespread use of smartphones and provides detailed property information and institutional-level analysis through its online platform, which in turn enables its investors to make informed decisions remotely. Current State and Future Demand The recent years have witnessed robust demand for commercial office spaces in India. The year 2022 saw a leasing of approximately 50 million square feet, marking the second-largest annual leasing in the past decade. While the pandemic-induced lull in 2020 and 2021 contributed to pent-up demand in 2022, the historical trend of strong demand persists.
The drivers of this demand include factors like outsourcing by global companies looking to reduce costs, geopolitical changes, and the transition of manufacturing activities from China to India.
“When the world experiences a recession, as has been the case over the past few years with factors like high interest rates, inflation, the pandemic, and even bank failures in the US, companies often resort to outsourcing to countries like India. This strategy aims to achieve further cost reductions amidst challenging economic conditions,” said Moktan.
A similar trend was observed in 2001 and 2008, in the aftermath of the 2008 Lehman crisis, when India witnessed a surge in leasing as global banks like Goldman Sachs, Morgan Stanley, and Societe Generale set up large centres to cut costs, Moktan said.
“This pattern of cost-effective outsourcing persists today, significantly fuelling the demand for commercial real estate,” he said, while predicting that the commercial real estate sector’s attractiveness will persist for the next three to five years at the very least, despite variations in annual demand.
To be sure, commercial real estate investment involves complexities such as lease structures, tenant agreements, and escalations. Despite these complexities, commercial real estate offers enticing returns. Unlike residential properties that yield around 2% in rental income, commercial properties can yield 8-9% or higher, along with appreciation, resulting in overall returns of 15-16%.
Moreover, commercial real estate offers a distinct advantage over other investment options in India, providing a guaranteed and higher yield than fixed deposits and equities. The combination of rental income and property appreciation sets commercial real estate apart as a valuable investment choice for retail investors, Moktan said.
This is particularly true in periods of high inflation and high interest rates. “In a high inflation, high interest rate environment, the opportunity cost of investing increases. When you compare a product like commercial real estate, which also has a yield, you would want some sort of premium to the risk-free rate, because then you’d rather invest in a risk-free bond than invest in commercial real estate. So, prices of commercial real estate also go down when interest rates go up, just like any normal bond or coupon-bearing instrument,” said Moktan.
He notes that investing in rent-yielding assets like commercial real estate during such periods can yield significant returns as entering the market at the peak of the interest rate cycle often translates to purchasing properties at lower prices. As interest rates eventually stabilise or decrease, property values tend to rise. This strategy positions investors to potentially buy low and sell high when economic conditions improve.
(This article is generated and published by ET Spotlight team. You can get in touch with them on etspotlight@timesinternet.in)
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
