Why Invest in The Real Estate Franchise Business in India 2024?
Written By: Yukta Palekar
The Indian real estate industry is witnessing a demand boom, with data centres’ demands projected to rise by 15-18 million square feet by 2025. In addition, luxury home sales in India jumped up by 130% in the first half of 2023 and the organized retail real estate stock is expected to increase by 28% to 82 million sq. ft. by 2023. So do you want to know more about the Real Estate Franchise Business and how it works?
By end of next year, Indian corporations are expected to mobilize more than Rs.3.5 trillion (US$48 billion) through infrastructure and real estate investment trusts compared to US$29 billion as at now.
Blackstone, a private market investor, also wants to invest an additional Rs.1.7 lakh crore (US$22 billion) by 2030. The government has allowed FDI up to 100% for townships and settlements development projects.
Private equity investments in India’s real estate sector reached an amount of $4.2billion during the year 2023.
How Can Investing in Real Estate Franchise Business Industry Be Profitable?
- Safety and Stability: Real estate is considered a safer and more stable investment compared to stocks and cryptocurrency. Lower volatility during uncertain economic conditions provides a sense of security for investors.
- Long-Term Appreciation: Real estate tends to appreciate over the long term, offering investors the potential for substantial returns on their investment.
- Government Initiatives: Pradhan Mantri Awas Yojana (PMAY) and Real Estate Regulatory Authority (RERA) are government initiatives aimed at boosting the real estate sector. These initiatives enhance transparency and instill confidence among investors.
- Crowdfunding Opportunities: Crowdfunding and online platforms have democratized real estate investment. Allows investors to participate in projects with smaller capital contributions, fostering greater diversification.
- Tax Savings: Government provides tax benefits and subsidies to real estate investors. Home loans offer tax savings, with first-time homebuyers eligible for deductions under Section 80C (up to ₹1.5 lakhs) and Section 24 (up to ₹2 lakhs on interest payable).
- Lower Risk Compared to Stocks and Cryptocurrency: Real estate is considered less risky due to its stability and lower volatility, particularly in uncertain market conditions.
- Affordability Through Tax Savings: Tax benefits contribute to lower investment costs, making real estate more affordable for investors. First-time homebuyers can leverage these savings to enhance their overall financial position.
- Government Subsidies: The government provides additional subsidies to support real estate investments, making it a more attractive option for potential investors.
- Transparency and Confidence: Initiatives like RERA enhance transparency in real estate transactions, fostering increased confidence among investors.
- Potential Lucrative Returns: Overall, real estate investment in India offers the potential for lucrative returns, combining stability, long-term appreciation, and government support.
Advice for Beginners for Purchasing the Real Estate franchise in India
- Thorough Market Research: Conduct comprehensive research on market trends, property values, and upcoming developments. Informed decisions are crucial for maximizing returns in the real estate market.
- Diversification for Risk Management: Diversify your real estate portfolio by investing in different types of properties. Managing risk and enhancing overall returns can be achieved through a well-diversified investment strategy.
- Long-Term Vision: Develop a long-term vision for your real estate investments, considering potential for appreciation and rental income. A strategic approach to long-term growth can yield substantial returns.
- Stay Informed on Market Dynamics: Keep abreast of market trends, economic indicators, and government policies. Adapt your investment strategy based on changing conditions to stay ahead in the dynamic real estate market.
- Choose Locations with High Growth Potential: Select locations with high growth potential, driven by factors such as urbanization, infrastructure development, and proximity to employment hubs. Optimal location choices significantly impact property value appreciation.
- Network Building in the Industry: Build a network within the real estate industry for valuable insights and opportunities. Seek advice from professionals like real estate agents, financial advisors, and legal experts to enhance decision-making.
- Consider Professional Advice: Consult with real estate agents, financial advisors, and legal experts for professional advice. Leveraging the expertise of professionals can provide valuable insights and mitigate potential risks.
- Effective Negotiation Skills: Develop effective negotiation skills, as well-negotiated deals can substantially impact overall returns. Negotiation is a critical aspect of successful real estate transactions.
- Adaptability to Economic Changes: Stay adaptable to economic changes and evolving market conditions. Being responsive to shifts in the economic landscape ensures a resilient investment strategy.
- Focus on High-Growth Factors: Prioritize factors contributing to high growth, such as emerging urbanization, infrastructural developments, and proximity to employment centres. Strategic location choices amplify the potential for property value appreciation.
Market Size of the Indian Real Estate business
The Indian real estate industry is expected to grow significantly by 2040, reaching a market size of Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. This growth is expected to contribute 13% to the country's GDP by 2025, with retail, hospitality, and commercial real estate also experiencing significant growth.
The sector is expected to expand to US$ 5.8 trillion by 2047, contributing 15.5% to the GDP from an existing share of 7.3%.In FY23, India's residential property market saw an all-time high value of home sales of Rs. 3.47 lakh crore (US$ 42 billion), marking a robust 48% year-on-year increase.
Developers are expecting demand for office spaces in Special Economic Zones (SEZs) to shoot up after the replacement of the existing SEZs act.Indian firms are expected to raise over Rs. 3.5 trillion (US$ 48 billion) through infrastructure and real estate investment trusts in 2022, as per ICRA estimates.
The office market in the top eight cities recorded transactions of 22.2 million square feet from July 2020 to December 2020, with the IT/Its sector dominating with a 41% share in the second half of 2020.The manufacturing sector accounted for 24% of office space leasing in 2020, with SMEs and electronic component manufacturers leasing the most between Pune, Chennai, and Delhi NCR.
The 3PL, e-commerce, and retail segments accounted for 34%, 26%, and 9% of office space leases, respectively.Fresh real estate launches across India's top seven cities grabbed a 41% share in the first quarter of 2023, marking an increase from the 26% recorded four years ago. New housing supply stood at approximately 65,211 units in the third quarter of 2021, increasing by 228% YoY.
In 2021-22, commercial space is expected to record increasing investments, with Chintels Group investing Rs. 400 crores to build a new commercial project in Gurugram. The current shortage of housing in urban areas is estimated to be around 10 million units, and an additional 25 million units of affordable housing are required by 2030 to accommodate the country's growing urban population.
One such growing brand in the market is The MySoho Franchise in India. Read on to know more.
About the MySoho franchise
MySoho is a fast-growing coworking brand that was founded in 2019 by professional individuals and technocrats not with non-real estate background. The focus of the brand is on fostering communities and equipping members with necessary resources.
The company offers workspaces that are built for purpose including ultra-fast fibre boardrooms, customized desks, and comfy office seats. Contracts are flexible offering unlimited boardroom bookings, printing 24/7 access, and beverages among others.
The objective of MySoho is to create sustainable workspaces for its members as well as community partners.
MySoho is a rapidly growing coworking brand that was created in 2019 by professionals and technocrats who did not come from real estate backgrounds.
The brand concentrates on creating communities and giving members what they need to succeed. MySoho creates custom workspaces with fibre optic high-speed internet connections, custom-made desks, armchairs, and computer chairs with lumbar support.
Inclusive contracts such as those giving unrestricted reservations for conference rooms round the clock printing services etc., can be tailored to fit diverse business needs.MySoho has become the fastest growing player in offices spaces; it combines plug-and-play experience, compliance practices, safety measures and modern design outlooks.
It offers a digital and app-based experience while also providing many locations which makes it a one stop shopThere are some parking lots lounges pantry refrigerator microwaveThe founders, including Shiva Mittal, Ashu Kapoor, and Navneet Gill, have experience in brand building, business intelligence, strategy, marketing, and operations expertise.
Why should you choose to have your franchise in MySoho in India?
MySoho is a franchise opportunity in India that seeks to tap into Tier II and Tier III towns as drivers of economic growth, business activities and entrepreneurship.
The company offers flexible workspaces and hybrid work-from-home options with a strong business modelling coming from venture capitalists.
The Franchisee fee is nonrefundable and it includes 50% or 80% gross revenue sharing split. Franchise period is 9 years with 3 years lock-in period and notice period.
MySoho’s roles encompass design & layouts, architect deployment while managing operations, costs, tech deployment, sales & marketing.
MySoho is a rapidly growing workspace company in India, focusing on creating Premium Private Office spaces in Tier2 and Tier3 cities.
It offers flexible spaces with premium design language, technology-based service delivery, and a top-notch service experience to its members and community.
For those seeking the best business real estate franchise in India, FranchiseBAZAR is a great option to register.
Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.
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