In times characterized by fiscal instability and erratic market conditions, savvy investors are always looking for ways to develop and safeguard their assets. In these circumstances, commercial property has emerged as a tempting investment opportunity, presenting distinct benefits and the possibility for long-term prosperity. In recent years, commercial ownership has emerged to be among the most profitable investment possibilities. The explanations for this upsurge are several, ranging from the possibility of high rental returns to rising demand for commercial space and the asset class's general stability. Commercial real estate has attracted the interest of investors searching for a lucrative outlet that's capable of withstanding economic swings due to its great returns, stability, and diversification benefits.
Let's take a look at why commercial real estate is increasingly being viewed as the best investment option in today's market, according to some of the industry's brightest minds.
According to Nakul Mathur, MD, Avanta India, “commercial real estate has garnered prominence as a most-preferred investment choice as it offers better returns on investments. Offices are the most desired investment vehicle within the commercial segment, with co-working places setting the trend. The region is witnessing a healthy commercial uptake with strong demand from IT-ITeS, BFSI, law, and boutique firms. Flexibility has become the keyword in the commercial real estate sector, and hybrid workplaces are attracting companies. In the future, there will be more focus on providing flexible office spaces that suit the demand of the evolving work patterns and help companies cut their operational costs by investing in spaces that come with modern-day working needs in a safe and sound environment.”
“A savvy investment is essentially one which is not only a safe bet but also yields high returns, commercial real estate ticks all the boxes when it comes to prudent investment options. Many factors contribute to this fact, the top few being capital appreciation, longer lease tenures, favourable government policies etc. Commercial properties hold the promise of substantive capital appreciation over a period of time. As the demand for commercial real estate grows and urban areas augment, property values tend to proliferate, making the investors earn considerable profits when they divest their assets.” said Mrinaal Mittal, Director, BlackTeak.
Further, the Government of India has accoutered many reforms and policies to encourage investments in the commercial real estate sector. Stratagems such as the introduction of Real Estate Investment Trusts (REITs), the relaxation of foreign direct investment (FDI) norms, and the implementation of the Goods and Services Tax (GST) have made commercial real estate a lucrative investment option. The government's emphasis on infrastructure development, such as that of industrial corridors, smart cities, and special economic zones, has further amped the demand for commercial real estate. These steps give birth to opportunities for businesses to expand and establish their presence, leading to exalted demand for commercial properties.
“Due to the rising need for workplaces, stores, and industrial spaces, commercial real estate has emerged to be the most exquisite investment opportunity in India. Considering the nation's prospering economy, firms are growing swiftly, necessitating more spacious and better-equipped spots, leading to an enormous spike in the patronage of commercial property. Furthermore, recent initiatives by the Indian government have created the industry more transparent as well as structured, resulting in a tempting proposition for both foreign and domestic investors alike. Considering the growing size of the Indian economy, commercial property offers significant potential for capital appreciation as well as consistent revenue flows. The industry continues to evolve, and facilities and transportation links are enhancing, attracting more companies,” said Suren Goyal, Partner, RPS Group.
Dr. Ananta S Raghuvanshi, President, NAREDCO Mahi said, “Commercial real estate seems to reap the rewards through increased demand amid instances of financial expansion, which could result in increased rates for renting as well as property prices. As opposed to residential homes, commercial buildings often have longer lease terms and regular rental revenue. It is frequently seen as insurance against inflation, considering the costs of renting are likely to go up in tandem with inflation. This type of real estate investment can help diversify an investment portfolio. Commercial spaces have got good acceptance from an increase in co-working space requirements. Also, where commercial land use permits mixed-use then studio apartments, senior living and student housing is a growing segment too, based on location.”
“Long-term property appreciation may add value over time, possibly yielding considerable profits when the property is sold. However, investing in real estate requires a significant amount of capital upfront and ongoing maintenance costs,” Dr Ananta later added. It is important to do thorough research and consult with financial professionals before making any investment decisions, as real estate can be a complex and volatile market. Overall, real estate can be a valuable addition to an investment portfolio for those willing to take on the risks and responsibilities involved.