Smart Cities And Commercial Real Estate:

Smart Cities And Commercial Real Estate

The landscape of real estate investment in India is constantly changing. Indian cities are not just made up of urban infrastructure, they are living, breathing entities that carry with them the spirit of their people: They move at a breathtaking speed, and they never sleep.

As the number of smart cities continues to rise in the country, so do opportunities for investment in commercial real estate. Urbanisation is accelerating, and traditional real estate investment models are giving way to more innovative and flexible approaches, with alternative real estate investments coming into the spotlight. 

The Growth of Smart Cities: A Global Shift

As per Statista Market Insights, the Smart City market revenue is expected to demonstrate a steady annual growth rate of 16.28% from 2023 to 2028. Furthermore, the market volume is also projected to expand to US$ 4.06bn by 2028. 

India’s Smart Cities Mission launched by the Central government is taking on steam: It aims to enhance urban infrastructure and improve the quality of life of citizens living in metropolitan cities. This ambitious mission seeks to transform 100 cities across the country into smart cities: That is, sustainable, consumer friendly, and technologically advanced hubs. 

While these smart cities become the focal point in their respective states, for investors seeking to capitalize on this new wave of urbanisation, they should recognise the inherent potential in the increasingly transformative commercial real estate sector. 

With the emergence of web based technology integrated alternative investment platforms, such as Assetmonk, it has become annoyingly simple for potential investors to take part in this urbanisation revolution and invest in commercial real estate. 

There are a number of different ways for investors who are looking to diversify their portfolios to branch out and invest in commercial real estate. 

Alternative Real Estate Investment Strategies: A Paradigm Shift 

Traditional real estate investment models generally require significant capital upfront, which makes it particularly challenging for a number of investors, particularly young investors looking to invest in the real industry, to access these investment opportunities. 

However, alternative investment models in real estate being offered by platforms such as Assetmonk are driving a change in this narrative. 

Some of these alternative investment models, such as fractional ownership, co-ownership of property, and joint ownership models have gained significant popularity: with the market size for these new asset classes growing exponentially in the last few years. 

Fractional Ownership: Changing the Game 

Fractional ownership in particular, is changing the real estate market, being one of the fastest growing real estate trends in the industry currently. 

One of the notable trends in the real estate industry is the concept of fractional ownership. This innovative approach enables multiple investors to collectively own a portion of a high-value property, providing them with a share of both the risks and rewards.

This novel approach allows multiple investors to jointly own a portion of a high-value property, allowing them to share both the risks and the rewards. With a focus on alternative investments, Assetmonk has seamlessly integrated this model into its portfolio, making commercial real estate more accessible to a broader investor base.

Advantages of Investing in Commercial Real Estate

One alternative investment asset that provides multiple streams of income and fixed, predictable returns is commercial real estate. Shops, offices, warehouses, and other commercial properties are secure investments that provide long-term capital growth and consistent rental income.

And with the growth of smart cities, investments in commercial real estate in these cities is only expected to increase. 

You Do the Math, Let Us Do the Numbers

As per data collated by Colliers, institutional inflows into the Indian real estate sector increased by 27% year on year to $4.6 billion in 2023, with domestic investments increasing. As of November 2023, Institutional inflows already 93 per cent of the total inflows recorded last year.

Industry experts and consultants, Cushman and Wakefield also identified up to 10 major tier two cities in India which have emerged as dark horses, driving forward commercial real estate growth. 

These cities, including Kochi, Lucknow, and Thiruvananthapuram show healthy signs of traction when it comes to overall commercial real estate development, as well as maturity in the residential housing market. 

Benefits of Investing in Smart Cities

Diversification

Alternative real estate investment provides investors the option to diversify their portfolios by spreading their investments across a number of commercial properties within smart cities, taking advantage of growing urban infrastructure in these cities. 

Liquidity

Investing in fractional ownership models or commercial leasing is particularly smart for investors looking for flexibility: You can buy and sell shares of a commercial property easily; thus adapting to changing market conditions and seizing new opportunities. 

Growth Potential of Smart Cities

Purchasing business real estate in smart cities puts investors at the forefront of urban growth. Property values in these cities are expected to rise as they develop, providing strong returns.

Sustainable Infrastructure

Green projects and sustainability are being emphasised world over and especially in smart cities. In addition to adhering to these ideals, commercial buildings with eco-friendly features also serve to meet the growing market demand for places that respect the environment.

Development of Both Residential and Commercial Sector

Integrated urban planning includes mixed space developments. These combine residential, commercial, and recreational spaces, which is a defining feature of smart cities. 

To facilitate investors looking to diversify their investment options, Assetmonk finds and invests in commercial properties located within these all-inclusive developments.

Assetmonk’s Approach to Commercial Real Estate Investment 

The modern investor who’s looking to foray into alternative investment in real estate has a lot of questions and preferences. Assetmonk prioritises the values and needs of the modern investor, and empowers them to participate in the growing commercial real estate market without shouldering a huge financial burden. 

By embracing fractional ownership and co-ownership structures, Assetmonk offers a diversified portfolio of commercial properties in burgeoning smart cities. This approach is tailored towards minimising risk and maximising potential returns for investors. 

This collaborative investment approach to real estate mirrors the spirit of these smart cities: living, breathing ideas which define the current urban landscape. 

Read More 

Types of Alternative Investment in India

A Guide To Alternative Investments in India

FAQs

Q: What is real estate fractional ownership?

A: Fractional ownership allows multiple investors to share the risks and rewards of a high-value property.

Q: What exactly is commercial real estate?

A: Commercial real estate properties such as shops, offices, and warehouses provide multiple income streams as well as long-term capital growth.

Q: How does smart city development affect property values?

A: As smart cities develop, property values are expected to rise, providing investors with strong returns.

Q: How will smart cities contribute to the growth of commercial real estate?

A: Smart cities are expected to boost commercial real estate growth by providing opportunities for sustainable and technologically advanced development.

Q: What are the current trends in the current real estate market?

A: Due to the flexibility and accessibility they provide, alternative real estate investment models such as fractional ownership, co-ownership, and joint ownership have grown in popularity.