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How Indian Family Offices Can Leverage Real Estate Analytics

What is a family office? It is a private wealth management service provided to ultra-high net worth investors to concentrate and control over family finances, legal issues, tax, and administration matters. It is believed to be an outsourced solution to regulate the financial and investment dealings of people or families. It operates to offer an optimal solution for developing, maintaining, and transferring family wealth. 

A family investment vehicle or family office is considered to be either a single-family office or a multi-family office. A single-family office backs one family but a multi-family office supports at least two families. Family Offices are growing in India as the country has new billionaires every year. There have been approximately 100 Family Offices that have come up in the past decade or so. 

For quite some time, real estate investing was propelled completely by speculation, educated guesses, and gut feeling. This is why investors kept repeating the same mistakes many times. While risk cannot be fully eradicated, real estate data analytics lets people make informed decisions about lucrative investments, thereby reducing the risk greatly. Today, real estate analytics can be used to increase wealth and enhance their competitive advantage. 

Let’s look at the ways Indian family offices can leverage real estate analytics:

Location

Data analytics provide significant insights into the existing trends in real estate investment. Locations can be evaluated based on factors like traffic congestions, school ratings, quality of life, and crime rates. Moreover, real estate data can aid in assessing how lucrative a location will be when it comes to occupancy prices, average rental income, and even the ROI of the area. 

Being able to zero in on the most optimal locations swiftly lets Indian family offices remain one step ahead of the competition in seeking rental properties. It also saves them the hassle of conducting prolonged searches via traditional research approaches. 

Pricing 

Whether a family office is interested in either selling or buying, price optimization is critical for building wealth in real estate. Indian family offices need to comprehend the market they are operating within to make the best possible pricing decisions. 

Quicker and More Precise Appraisals 

Acquiring an appraisal is very significant before purchasing or selling an investment property. Real estate data analytics offers a lot of details about sales for comparable properties in the same area. Investment property analysis makes it effortless for valuators to deliver price estimations swiftly to family offices. 

Commercial Trends 

Commercial real estate investment is generally more large-scale and complex as compared to residential property investment. Thus, investing profitably in the commercial property needs detailed and comprehensive real estate data analytics on consumer trends. It will help family offices make a more informed decision. 

Competition Analysis 

Real estate data analytics can help family offices assess the performance of their competitors who are in the real estate industry. Which firms are believed to be the most trustworthy? Who is selling the most? What consumer rating do they have? What kind of promotional techniques are they using? Family offices can also make use of data analytics for profits, sales figures, and customer reviews to evaluate their performance.

Tenant Targeting 

Using predictive real estate data analytics, family offices can help decide who their tenants will be in the following years. Data analysis makes it more effortless for family offices to target their marketing properly. 

Real estate markets are believed to be unstable, complex, and always in charge. Thus, Indian family offices would benefit from real estate data analytics to make intelligent investment selections and increase their return on investment. Thanks to data analysis, family offices can accurately assess where and when to invest, as well as decide the appropriate value of properties. 

For more CRE industry insights and data research do Contact us.

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Andheri West – What makes it the preferred office and housing destination for developers, investors and homebuyers?

Andheri_ West

Andheri West has witnessed a phenomenal Real Estate transformation over the last 15-20 years. Starting with the Mumbai International Airport and Mumbai suburban local train station to Mumbai’s first Metro Line, two upcoming metro lines and upcoming Coastal Freeway. All these infrastructure developments shall help connect Andheri to all other parts of Mumbai – Northern suburbs, South Mumbai and Eastern Suburbs. Andheri West is one of the prime examples among Mumbai City Micro-markets which boasts an amazing mix of Office buildings, Shopping Centers, Retail High Streets and High-end Residential. Andheri West’s population is approx. 400,000 with about 100,000 households having an average monthly income of INR ~150,000. The housing market in Andheri West has always been buoyant and continues to witness the same trends given consistent new job creation and quality housing development. In 2019 and 2020, Andheri West witnessed housing sales of ~2,200 units and ~1,500 units respectively.

Andheri_West

The total commercial office stock at Andheri West stands at about 4.5Mn sqft. However, there are a greater number of Grade B office buildings in Andheri West compared to Grade A buildings. Given the lack of new Grade A office supply in Andheri West, secondary (older) office sales market has been more active compared to the primary office sales market among investors. The offices market in Andheri West has historically been an investor driven market and we foresee the same trend to continue. Andheri West Offices Capital Values appreciated by 15% in the last 5 years alongside rental yield of approx. ~7%, giving the investor a handsome annual return of ~10% per year. We strongly believe investors will prefer investing in new Grade A buildings compared to older supply. Five new Grade A commercial office buildings are under various stages of construction, totalling to approx. 900,000 sqft. In the past, both occupiers and investors have shown preference for offices sizes up to 2,000 sqft carpet area, primarily because the key occupier sectors have been BFSI, Media & Entertainment, CAs, Lawyers, etc.

Contrary to common belief that Bandra-Khar Linking road is the most active High Street in Mumbai, we would like to differ in opinion. We believe High-Streets of Andheri West have a wider spread not only in terms of size but also in terms of number and quality of retailers. Andheri West High-Streets can offer you everything from clothing to electronics, from jewellery to automobiles, from F&B to fashion accessories. Given the thick housing market, most private and PSU Bank have multiple bank branches and ATMs in Andheri West. Similar to the office asset, the high-streets in Andheri West have offered handsome annual returns of ~12% to its investors.

Related Article: BKC displaced Nariman Point as Mumbai’s CBD! Read on to know why BKC won’t be dethroned in the next 5-7 years.

Covid-19 has only augmented the need for mixed developments and self-sustained micro-markets with all asset types including offices, retail, housing, hospitality, healthcare, education etc. More and more people want to reduce their commute time, Work from Home and aspire to reside in vicinity of all possible recreation choices.  We believe Andheri West is one of the best micro-markets in Mumbai that offers all the above to not only home buyers but also to office commuters. To summarize, solid existing & upcoming infrastructure, robust housing demand, significant presence of high-end Retailer brands in Malls and High-Streets and growing office market, makes Andheri West one of the most attractive real estate investment markets for long-term investors.

For more CRE industry insights and data research do contact us

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The ‘Mumbai’s Next CBD’ Debate Settled

BKC as CBD

BKC displaced Nariman Point as Mumbai’s CBD! Read on to know why BKC won’t be dethroned in the next 5-7 years.

Bandra Kurla Complex (BKC) has witnessed a phenomenal transformation over the last 20 years. The State Government set the ball rolling by appointing MMRDA as the special planning authority to develop BKC (Bandra Kurla Complex) as an alternative to the erstwhile CBD (Central Business District) – Nariman Point.

After initial reluctance, some of the Private and PSU Banks and companies shifted their headquarters to BKC. The National Stock Exchange opened its headquarters in BKC in 2001. Soon after, developers realized the potential and picked up land parcels in the region to launch multiple Grade A+ commercial projects. The total stock at BKC stands at about 18 Mn sqft as on year-end 2020. Diamond Bourses (~2 Mn sqft) opened its doors in year 2010. As of today, some of these Grade A+ commercial projects command the highest rent in the country for office space.

BKC currently houses some of the biggest Indian and International businesses including Amazon, Netflix, GIA, Bank of America, GIC, Google, Novartis, Pfizer, Wework, Kotak Bank, National Stock Exchange, SEBI, ONGC etc. These occupiers employ more than 200,000 people who commute to BKC daily, fuelling the growth of social infrastructure such as restaurants, gymkhanas, schools, hotels, luxury housing projects etc. Reliance shall move its headquarters to Jio World Centre, a 7Mn sqft convention centre which is expected to house office spaces, luxury mall, hotels, a performing theatre, convention centre etc.

One of the most well-connected suburbs of Mumbai city, BKC is also the epicentre of most of the major existing and upcoming infrastructure projects – Mumbai Highways, upcoming Metro lines, upcoming Bullet train project, SCLR, Bandra-Worli Sealink, upcoming Coastal freeway etc. Such a central location advantage with convenient connectivity to Northern suburbs, South Mumbai and Eastern Suburbs gives Bandra a big edge over any other micro-market. BKC is also surrounded by prime residential localities such as Bandra West, Khar West, Santacruz West on the West and Chembur, Wadala and Vikhroli on the East. Existing physical Infrastructure makes it easier for residents in these localities to easily commute to BKC. Nearly 85% of all senior employees at BKC reside in these neighbouring suburbs.

We foresee further development in and around Bandra Kurla Complex not only for office complexes but for retail malls, cinemas and hotels over the next 5-7 years. Around 4-5 Mn sqft more Grade A+ commercial office projects are planned which will generate about 50,000 new jobs in BKC over the next 5-7 years. Till then, we can comfortably shelve the case file of ‘CBD of Mumbai’ with a seal of BKC on it.

For more CRE industry insights and data research do contact us