‘Why commercial space investment is the best kind of investment!’

Commercial

Commercial spaces are one of the best investments to consider these days. However, there are multiple options when it comes to making speculations for an investment.

Asset categories of any kind can be a good investment depending on multiple factors, gold, stocks, mutual funds, and residential properties all have their own benefits. 

They all make good investments, but the returns on commercial spaces have been ever-increasing and have significantly high returns.

With people going back to work and the pandemics’ effect being lessened in Asian countries, now’s one of the best times to invest in commercial spaces.

Index: 

  • What are commercial spaces?

  • Benefits of investing in commercial spaces

  • Hindrances in investment

  • Commercial spaces in Hyderabad

What are commercial spaces?

Commercial spaces or commercial property are of various kinds such as:

  • Retail buildings
  • Office buildings
  • Warehouses
  • Industrial buildings
  • “Mixed-use” buildings, where the property may have a variety of uses, such as retail, office, and apartments; and
  • IT/ITES buildings

Office spaces, retail spaces, and commercial plots are the three most widely-known types of commercial real estate that you would find in India. 

In this article, we are going to be speaking generally about all three of these types of commercial properties.

Benefits of investing in commercial spaces -

Commercial Real Estate is one of the best asset classes to make an investment in. It is stable and has higher returns when compared to other investment options in India like gold, stocks, or residential properties.

There are numerous other reasons as to why you ought to invest in commercial property now, and the following are a couple of the most widely-recognized ones – 

  • Pay potential
  • Proficient dealing
  • General visibility
  • Objective price evaluations
  • Adaptability in rent terms

Pay potential -

The best reason to invest in commercial properties is the profit and pay potential. Commercial properties usually have an annual return off of the purchase price between (6% and 12%), depending on factors such as the area, the present economy, and other external pointers. Which is a much higher range of returns when compared to ordinary residential properties (1% to 4%), and other asset classes like stocks, gold, and mutual funds.

Proficient dealing -

Small business owners tend to take pride in their businesses and try their best to protect their livelihood.

Owners of commercial properties are usually LLCs, not individuals, and hence operate the property as a business.

Hence, the landlord and tenant have more of a B2B (Business-to-Business) relationship, which helps keep interactions professional and courteous.

General visibility -

Retail tenants have a dedicated interest in maintaining their store and storefront because if they don't, it will affect their trade. In return, the interests of both the parties (owner and tenant) are aligned, which helps with the maintenance and improves the quality of the property, the value of their investment, and its profit, all in due time.

Objective price evaluations -

It's often easier to evaluate the prices of commercial property because you can request the current owner's income statement and determine what the price should be based on that. If the seller is using a well-versed broker, the initial price should be set in a way where the investor can earn the existing area cap rate for the property type they are looking for (retail, office, industrial,mixed-use, etc).

Adaptability in rent terms -

Fewer consumer protection laws exist over commercial leases, there are lesser laws on security deposit limitations, maintenance, and other such factors that may surround the asset class. Hence, making it easier for owners to legally gain more profits.

Hindrances in investment -

Commercial spaces are a great investment, but there are a few obstacles that should be kept in mind while going for them as an option.

Commercial investments take time when it comes to reaping profits, at least a year or two is expected after making the initial investment. But that isn’t always the case.

Some investment properties start giving back to the investors a day after the investment is made, which eliminates the issue of having to wait for results.

The subsequent snag is knowing which commercial property to invest in and frequently requires proficient direction. Bridl360 has been in the real estate field for a long time and can help you pick the right property to make an investment in.

Commercial investments can be highly-priced when compared to other kinds of investments like gold or mutual funds, but the pros outweigh the cons.

Commercial spaces in Hyderabad -

Apart from being a thriving residential market, Hyderabad is also equivalently successful with commercial real estate.

Based on reports made by multiple property brokerage firms – Hyderabad and Bangalore were the most active commercial real estate markets in 2020, accounting for 23.7% and 22.9% share in pan-India leasing activity.

The Hyderabad office market is giving indications of recuperation, with a very healthy gross leasing of 1.9 million sq ft during the July-September 2020 period. 

Likewise, the net assimilation rate developed by 31% from the previous quarter to 1.5 million sq ft in 2020.

So what better time could it be to invest in commercial spaces? 

We at Bridl360 can assist you in finding a property that will be the best investment you could possibly make, contact us to speak to our experts and find a wise venture today!

We shall conclude our article on that note. Kindly like, share, or subscribe to stay tuned for more content from our website.

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