Now that a strong platform is laid by government, India is transforming towards a breeding ground for business. Strong demands from flourishing segments like e-commerce, Information Technology and IT-enabled sectors, engineering/manufacturing industries, banking and financial services have increased the absorption levels in top quality offices and commercial spaces.
So the demand will rise soon and it is the perfect time for you to invest in commercial properties. Even though it has lower property cost than residential properties in micro markets, you will be getting double income in terms of rental. Top quality properties, despite of any genres like office spaces, retail or high street place, commercial properties will yield you high capital appreciation and rental yields. According to a report, while the annual rental income of residential spaces stands at just 2 percent, the commercial properties revealed to yield about 8 to 11 percent.
While residential properties offer you a lot of speculative buying, office spaces will be mostly driven by end-use. It is also not that easy to sell a commercial property than a residential property. But it’s easier to find tenants for commercial space. This will make commercial spaces ideal for investments.
We all invest in commercials in terms of rental yield. It is ideal to invest in a property which is already leased out, since it will assure cash flows. Normally, rental agreements are signed for three to five years. As the tenant pays for the fit outs of the space, the occupiers are less likely to vacate. For this you also need to identify which type of firm is occupying your space. Firms with good brand name or financial structures like banks will lessen the chances of frequent shifting and ensure continues cash flow.
If you are investing in a particular commercial space where there aren’t multiple owners and just a single developer, then it’s ideal to invest. This assures good infrastructure for your commercial space which in turn will be the key factor for renowned companies to consider while occupying the space.
Location for retail
Investing in retail spaces in supreme location will get you enough footfalls even if the business is sluggish. In case of retail or high street the rental income is estimated slightly lower than rental yields in office spaces. Investor should also keep an eye on details like infrastructures, occupancy rates and the neighbourhood while investing in retail spaces.