India has witnessed growth & expansion in several real estate asset classes that are often categorised as alternative assets since they fall outside the more mainstream assets such as stocks, bonds & shares etc. Commercial real estate includes any property that primarily generates income or supports businesses, whereas residential properties are for the purpose of living but can also provide passive income opportunities.
In the last few years a new asset class of managed farmlands has emerged and has quickly gained popularity. Until recently there was a high barrier to entry for individual investors (from a non-farming background) to take advantage of the appreciating value of managed farmland assets.
The Indian Real Estate Market
For a long time, real estate has been the most favoured of all asset classes in India. Since it has been such an attractive proposition, the real estate market is the second-highest employment generator in the country (after agriculture). It has ceaselessly attracted investors looking for passive income, and the rapid urbanization has added a huge impetus to the market. But what is also true is that the real estate market in India is collapsing. Thanks to flawed regulatory mechanisms, several real estate companies are in debt, and there exists an increasing inventory of unsold real estate projects. This situation, coupled with the Covid-19 pandemic, has resulted in people looking for different avenues of investments.
Why are Managed Farmlands more rewarding than Real Estate?
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