India’s Ultra-Rich Increasing Real Estate Investments, Almost Half Bought Residential Property Abroad

India’s wealthiest are increasingly looking beyond domestic borders for real estate opportunities. According to the Kotak Private Banking “Top of the Pyramid” report, a growing number of Ultra-High-Net-Worth Individuals (Ultra-HNIs) are building portfolios that span continents, with 47 per cent investing in residential property abroad and 35 per cent holding foreign commercial real estate. As geopolitical uncertainty and migration plans reshape financial strategies, global real estate is emerging as a key asset for both diversification and long-term security. The average cost of these properties was over Rs 25 crore.

“More than half of Ultra-HNIs planning to migrate have already bought homes overseas,” the report states, underscoring real estate’s dual function as an investment and a lifestyle enabler.

This indicated a renewed faith in property as a bedrock for capital preservation and income generation. Latest data revealed a striking 5 per cent year-on-year increase in real estate allocation by UHNIs over the past year.

According to the report, real estate is now the second-most preferred asset class for Ultra-High-Net-Worth Individuals (Ultra-HNIs), trailing only equities. On average, 29 per cent of their portfolios are now allocated to real estate.

Commercial real estate offers higher rental yields, more stable lease terms, and long contracts, which is a combination most Ultra-HNIs are looking for, as per the report.

Liquidity and diversification also prompted Ultra-HNIs to look at indirect real estate investments. 38 per cent were interested in REITs and 21 per cent in Infrastructure Investment Trusts (InvITs). These vehicles provide an opportunity to invest in large-scale assets with less capital while delivering low-risk cash flows in the form of dividends.

Recent regulatory changes are also driving this trend. In 2024, SEBI revised its REIT guidelines to include Small & Medium REITs (SM REITs), categorising the asset size of SM REITs between Rs 50 crore and Rs 500 crore, whereas the following could go as low as Rs 10 lakh. This is likely to normalise access and fuel growth in the REIT market, drawing not only UHNIs but also HNI retail investors, the report added.

Of those surveyed, 45 per cent ranked commercial properties as their No. 1 real estate asset, compared to 33 per cent for residential. While residential assets retain emotional and migratory appeal, commercial holdings are viewed as superior for long-term income generation.