Land investment, rental monetisation give 10 times higher profit than apartments: Report

Neral-Matheran in Maharashtra is predicted to have a 5X return on land investment, followed by Sanand-Nal Sarovar in Gujarat and ECR in Chennai at 3.5X. Mumbai, Hyderabad, Ahmedabad, Chennai, and Kolkata have emerged as cities witnessing huge growth in India, according to the Colliers Report.

File photo
File photo

Investing in land and monetising it in rental format gives a 10 times higher yield than ready apartments, according to a report - 'Top Investment Corridors in India' – by Colliers' Advisory Services. There has never been a better opportunity to reap the full benefits of real estate investments in India, the report said, highlighting factors such as enhanced housing affordability, pandemic-era savings, health and wellness hygiene, and favourable investment policies as key drivers that are triggering housing demand across the country.

The real estate sector in India is continuing to get traction, coupled with acceleration in infrastructure developments. This is leading to micro-markets in India across major metropolitan cities evolving as key investment corridors, the report said. 

The report showed that with well-chosen assets, investors can enjoy consistent cash flow, good returns, tax advantages, and diversification—and it is possible to utilise real estate to build wealth. Real estate investors earn money via rental revenue, appreciation, and earnings from company activities that rely on the property.

Mumbai, Hyderabad, Ahmedabad, Chennai, and Kolkata are among the cities witnessing huge growth in India, according to the Colliers Report. 

As per the report, several key factors are taken into consideration while delineating cities - including employment, infrastructural development, regional connectivity, accessibility to healthcare and educational facilities, safety and security, environmental sustainability, good governance, and socio-political stability Maharashtra 

Mumbai is one of the most vibrant and dynamic real estate markets in the country due to high property prices, limited land availability, and a growing population, which creates significant demand for real estate. The locations such as Vasai Virar, Bhiwandi, and Neral-Matheran, are the key hotspots, led by the availability of non-agricultural large land parcels along with key upcoming infrastructure developments and the presence of branded developers.

Due to the presence of branded developers with sizeable real estate projects, proximity to the city centre, and well-established social amenities such as Bhimashankar Wildlife Sanctuary, ND Film Studio, Neral-Matheran toy train, and Rambag point, the Neral-Matheran corridor has emerged as a major hotspot amongst investors, the report said. 
The Neral-Matheran micro-market is regarded as one of the important investment zones, with an average yearly rental yield of 15 per cent for holiday houses and a 5X return on land investments predicted over the next 10 years, the report added.

Gujarat's tourism and industrial hubs, including the Sanand Nal Sarovar corridor, ECR in Chennai, Medchal in Hyderabad, and New Town and Rajarhat in Kolkata, are also attracting investment. These corridors, with adequate land availability, rising tourism momentum, and infrastructural uptake, are developing as destination investments with an average annual rental return of 2.5 per cent - 4.0 per cent and annual land price gain of 6 - 8 per cent.

Chennai- The large availability of land parcels along Old Madras Road (IT hub) and East Coast Road (ECR) with established social & upcoming physical infrastructure and other amenities are attracting investors/buyers to invest in land and real estate properties at various price points to gain higher returns.

Hyderabad- the Outer Ring Road (ORR) in Hyderabad is a critical component of the city’s evolution with the vast availability of land parcels leading to a significant land investment opportunity. This has improved Hyderabad’s economic environment, reduced urban congestion, and encouraged sustainable suburban development.

Kolkata- The areas of Rajarhat, New Town in East Kolkata, and Joka are developing as key investment spots. With metro construction in full swing, the buyer and developer community will likely gain more confidence about investing in land along the corridors.