Sunil Sisodiya, founder of Geetanjali Homestate Pvt Ltd. is a renowned and dynamic personality working in the real estate industry for 12-plus years, with professional and valuable services. He has persistent efforts toward boosting the Indian economy with real-estate ethical services. He is a youth icon who always initiates social services that can uplift the society. Sisodiya believes that Transparency, Integrity, Quality, and Trust are the four pillars of the company that build a strong foundation, and can expand its horizons to reach the pinnacle of success.
When thinking of investments, it can be as simple as investing in banks or stocks. But the processes, at times, make it more complex to go for it. Real estate comes as another option for investments which can give results for a long span of time. Commercial properties have been garnering a lot of attention and consumers are now all the more keen to invest in commercial spaces.
Why choose commercial real estate?
Investment in real estate usually means investing a lump sum amount at once. Commercial real estate (CRE), an essential component of the real estate industry comprising business, retail and office spaces, is currently at the forefront when it comes to investing. Investments in the CRE are usually done via real estate investments trusts or through fractional ownership.
CRE investments come with a certain set of benefits in comparison to the traditional investment options. It comes with a specific lock-in period which guarantees the investment while assuring the returns on the same. As a long-term investment, it is the most stable investment option with a constant return value. If the CRE is in a prime location, it can prove to be a gold mine for the investor owing to its demand pertaining to attracting tenants. The renewal of the property also keeps giving a regular income for the investor.
Shop-cum-Offices: A booming concept
The Shop-cum-Offices (SCO) concept is an initiative by the Haryana Government. Under this model, both commercial spaces and offices are set up in the same building especially at prime locations. They are freehold plots where the basic infrastructure facilities are provided and they can be built as well as customized as per the investors’ wishes. The owner has complete ownership rights of the land. Properties such as banks, healthcare centres, retail shops, cloud kitchens, eating joints, etc. are on the lower floor and the offices occupy the upper floors. The footfall in such properties is huge. Along with this, capital appreciation is optimal, the stream of lease rentals is steady and the risk levels are comparatively less. Hence, both developers and investors benefit from investing in such spaces.
It is the latest trend that is driving the commercial real estate segment. The Haryana Government’s commercial plotted colony policy is playing a vital role in pushing the SCO segment. Encouraged by this scheme, developers, particularly in Gurgaon and Faridabad, are pushing this concept as an asset in the real estate segment. Various investors are now eyeing SCOs as a sought- after-asset class for diversifying their portfolios. Due to its various benefits and bringing together both retail and offices, this segment is garnering the interest of the investors in the commercial real estate segment.
Factors to consider before investing in CRE
With investment comes a huge amount of research affecting it. Some top factors which needs to be considered during the investment are as follows:
Location – When deciding to invest in CRE, location plays an important role in deciding it. This is one factor equally important for both residential and commercial. Accessibility via roads and railroads, major highways, proximity to airports, and seaports are factors that can make or break the value of the asset and how much it can appreciate over the course of time.
Market Conditions – Changes in the market affect the dynamics of the tenancy, stability of occupancy etc. Keeping an eye on what businesses are stirring the economy is a great way to understand which commercial real estate asset is the one you should be looking out for next.
Documentation – Another but the most important factor to look at is the documents part of the CRE. If getting a CRE of your own, it is considered to take the help of an advisor. Taking adequate help from legal support to go through all the paperwork to check any ambiguous clause or hidden charge. It is always better to be safe and understand the situations.
Summing up
When considering investing, commercial properties enjoy an edge in today’s times due to a plethora of reasons. The higher annual rental appreciation, lifetime asset value, and the surge in demand leading to greater long term return are all the major benefits offered by investing in CRE. The Shop Cum Offices concept driven by the rise in hybrid work models is garnering investors’ interest. Furthermore, the construction of the Southern Peripheral Road and Deen Dayal Jan Awas Yojana scheme are further boosting the CRE investments. Due to these reasons, commercial real estate is gradually emerging to be an ideal investment source.