All You Need to Know about Making Commercial Real Estate Investments

Posted by aiplgurgaon on September 11th, 2019

When making a real estate investment, most people tend to limit their scope to residential properties. However, so should not be the case. This is because, both, the equity and income potential of investing in a commercial property is much superior.

An insight on investing in a commercial property

Commercial real estate basically refers to any type of property that has been developed with the intent to garner profit for the owners from capital gains. Commercial properties might include industrial buildings, retail units, office spaces, and even warehouses. Mixed-use buildings featuring a combination of commercial and residential spaces can also be considered to be commercial properties.

The high return on investment (ROI) guaranteed by commercial properties is one of their biggest highlights. They typically provide much superior ROI in comparison to most residential properties. While the average ROI for residential real estate in India is somewhere between 3-4 percent, for commercial properties it is around 8-9 percent. As a result, commercial property investors can typically expect to enjoy superior monetary returns on their real-estate investments.

Being a developing country, the number of companies being registered in India is increasing with every passing day. This factor has provided a great boost to the demand for office spaces in India. Hence, people investing in such properties in India can enjoy superior rental income or resale value from it.

The popularity of shopping malls

A good chunk of the commercial real estate market of India comprises of advanced shopping malls and retail centers. The rapidly growing popularity of shopping malls in India has been one of the important driving factors behind the flourishing commercial real estate scenario of the nation. The lifestyle changes and the increasing disposable income of the Indian middle-class has significantly revolutionized the Indian retail sector, subsequently boosting the popularity of shopping malls here. With its rising popularity, numerous state-of-the-art shopping centers and malls have been developed across the nation. In addition to the metros, people can find such commercial properties in Amritsar, Jaipur, Ahmedabad, Lucknow, and other tier-2 cities of the nation. As numerous modern retailers choose to rent space in such malls to open their shops here, investing in such properties can be extremely advantageous for contemporary real estate investors.

Importance of commercial property location

The location of a commercial property is one of the key aspects that savvy investors have to take into consideration prior to making their purchase. Rent and capital returns are two of the major avenues through which commercial properties provide returns on investments. Both of these elements are highly dependent on the location. Investing on high-end commercial properties in Amritsar, Gurgaon, and other rapidly flourishing cities can especially prove to be quite a prudent move for the investors. The demand for commercial real estate in these cities is consistently increasing, owing to large-scale development initiatives taken up there. Numerous people are choosing to open their offices or retail units in these destinations to attract well-educated workers or affluent customers. The commercial real estate scenario of Amritsar would especially be quite advantageous to invest in, owing to the good connectivity and premium socio-economic-infrastructure of this city.

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