Investing in Indian property today is a challenging task. On one
hand, with the rupee touching all time lows against the dollar, it
appears to be a great time to remit funds to India for investment.
However, on the other hand, with India’s growth story looking bleak, the
prospect for high returns seems an uphill task. Vidhan Properties here
understands the needs and requirements of all our investors and
customers of buying commercial property in India.
If you are keenly looking at investing in property in India, considering commercial spaces. Here are the best 5 tips which you need to keep in mind while buying any commercial property in India,
1. Location
Investors need to establish the soundness of the location and its demand/supply dynamics. If they do not engage in sufficient research, they may end up buying into micro markets which have or will have high vacancies. Today Delhi, Bangalore and Mumbai offer the best investment opportunities for commercial.
2. Type of property
In fact, if you are looking at buying retail space, It is advisable to look at high street rather than a mall as a strata sold mall is a recipe for disaster. In a strata sale model, shops in a mall are pre-sold to individual investors. The developer thus restricts himself to selling a store as a unit and investor can hunt for a tenant.
The problem arises because the model has no control over trade and tenant mix and there is no cohesiveness to the mall to attract customers as much as they can in a high street place.
3. Out Lay
The Real Estate deals with the land by buying, selling and giving the land on rents. The real estate business provides complete facilitation about the dealing of land. The land can be it farm, house, building, factory, Institutional or commercial building.
Vidhan properties always suggest that the minimum budget you should have in mind for a commercial investment is Rs 3-4 crore. It is noted that many times buyers tend to ignore rental yield and instead focus only on capital appreciation.
When you buy a commercial property, make sure that you can get a rental yield of at least 11-12%. A yield of less than that means the property is overvalued
4. Expected returns
You can expect returns of 10-11% per annum from commercial investment. Remember, you do not only make a profit on the sale of appreciated commercial property.
The rental cash flows of a well-located office or shop space are considerable. Unlike with a residential property, the income that can be generated from commercial property is what determines its value. In other words, the capitalization rate is actually the measure of the demand for the property.
5. Due diligence
If you are an investor looking at an income producing office asset, look at the break-up of cash flows, the vacancy factor, expenses such as maintenance, property tax and building insurance, lease term, lock-in period and expiry dates, long-term capital appreciation potential, and refurbishment, refinancing and repositioning potential.
Aurum Estates offers every solution that comes within the ambit of real estate business: sale& purchase, relocation, real estate investments, real estate consultancy and management.We believe in offering a solution that works and an investment decision that changes the lives of our customer.We are the most trusted & ethical Residential and Commercial real estate consultants in Gurgaon NCR. It’s our highest client customers satisfaction standards & transparency that has resulted in increasing our investor base both national as well as international
Contact Us
Vijay Chawla
Aurum Estates
Shop No 1 Main Sohna Road
Opposite Uniworld Garden,
Adjoining indian oil petrol pump,
Sohna Road Gurgaon
(Haryana) 122018 India
Tel : +91 1243295123
Mob : +91 9811210388, 9999597969
Fax : +91 1242217833
Email : aurumestates@gmail.com
Website : http://www.aurumestates.com
If you are keenly looking at investing in property in India, considering commercial spaces. Here are the best 5 tips which you need to keep in mind while buying any commercial property in India,
1. Location
Investors need to establish the soundness of the location and its demand/supply dynamics. If they do not engage in sufficient research, they may end up buying into micro markets which have or will have high vacancies. Today Delhi, Bangalore and Mumbai offer the best investment opportunities for commercial.
2. Type of property
In fact, if you are looking at buying retail space, It is advisable to look at high street rather than a mall as a strata sold mall is a recipe for disaster. In a strata sale model, shops in a mall are pre-sold to individual investors. The developer thus restricts himself to selling a store as a unit and investor can hunt for a tenant.
The problem arises because the model has no control over trade and tenant mix and there is no cohesiveness to the mall to attract customers as much as they can in a high street place.
3. Out Lay
The Real Estate deals with the land by buying, selling and giving the land on rents. The real estate business provides complete facilitation about the dealing of land. The land can be it farm, house, building, factory, Institutional or commercial building.
Vidhan properties always suggest that the minimum budget you should have in mind for a commercial investment is Rs 3-4 crore. It is noted that many times buyers tend to ignore rental yield and instead focus only on capital appreciation.
When you buy a commercial property, make sure that you can get a rental yield of at least 11-12%. A yield of less than that means the property is overvalued
4. Expected returns
You can expect returns of 10-11% per annum from commercial investment. Remember, you do not only make a profit on the sale of appreciated commercial property.
The rental cash flows of a well-located office or shop space are considerable. Unlike with a residential property, the income that can be generated from commercial property is what determines its value. In other words, the capitalization rate is actually the measure of the demand for the property.
5. Due diligence
If you are an investor looking at an income producing office asset, look at the break-up of cash flows, the vacancy factor, expenses such as maintenance, property tax and building insurance, lease term, lock-in period and expiry dates, long-term capital appreciation potential, and refurbishment, refinancing and repositioning potential.
Aurum Estates offers every solution that comes within the ambit of real estate business: sale& purchase, relocation, real estate investments, real estate consultancy and management.We believe in offering a solution that works and an investment decision that changes the lives of our customer.We are the most trusted & ethical Residential and Commercial real estate consultants in Gurgaon NCR. It’s our highest client customers satisfaction standards & transparency that has resulted in increasing our investor base both national as well as international
Contact Us
Vijay Chawla
Aurum Estates
Shop No 1 Main Sohna Road
Opposite Uniworld Garden,
Adjoining indian oil petrol pump,
Sohna Road Gurgaon
(Haryana) 122018 India
Tel : +91 1243295123
Mob : +91 9811210388, 9999597969
Fax : +91 1242217833
Email : aurumestates@gmail.com
Website : http://www.aurumestates.com
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