In times characterized by financial volatility and uncertain market conditions, savvy investors are always looking for ways to grow and protect their assets. Under these circumstances, commercial property has emerged as an attractive investment opportunity, offering distinct returns and the potential for long-term prosperity. In recent years, commercial ownership has emerged as one of the most profitable investment avenues. There are many explanations for this boom, from the potential for higher rental returns to increased demand for commercial space and the general stability of the asset class. Commercial real estate has attracted the interest of investors searching for a lucrative outlet that is able to withstand economic swings due to its great returns, stability and diversification benefits.
Let’s take a look at why commercial real estate is being seen as the best investment option in today’s market according to some of the brightest minds in the industry.
According to Nakul Mathur, Managing Director, Avantha India, “Commercial real estate has gained prominence as the most preferred investment option as it offers better returns on investment. Offices are the most desired investment vehicle within the commercial segment, with co-working spaces setting the trend. The region is witnessing a healthy commercial boom 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 future, there will be more focus on providing flexible office spaces that suit the demands of evolving work patterns and help companies cut down on their operational costs by investing in spaces that come up with modern working requirements in a safe and healthy environment .
“A sensible investment is essentially one that 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. Several factors contribute to the fact , top few are capital appreciation, long lease tenure, favorable government policies etc. Commercial properties hold the promise of substantial capital appreciation over a period of time. As the demand for commercial real estate increases and urban areas grow, Property values tend to appreciate, allowing investors to make substantial gains while disinvesting their properties, said Mrinal Mittal, director, Black Teak.
In addition, the Government of India has implemented several reforms and policies to encourage investment in the commercial real estate sector. Strategies such as the introduction of Real Estate Investment Trusts (REITs), relaxation of foreign direct investment (FDI) norms, and implementation of the Goods and Services Tax (GST) have made commercial real estate an attractive investment option. The government’s thrust on infrastructure development such as industrial corridors, smart cities and special economic zones has further fueled the demand for commercial real estate. These moves give rise to opportunities for businesses to expand and establish their presence, thereby creating a high demand for commercial properties.
“With the growing need for workplaces, shops and industrial spaces, commercial real estate has emerged as one of the best investment opportunities in India. Considering the country’s flourishing economy, companies are growing rapidly, requiring more spacious and better-equipped spaces, leading to a huge increase in commercial property protection. Furthermore, recent initiatives by the Government of India have made the industry more transparent and structured, resulting in an attractive 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 flow. The industry continues to grow, and facilities and transport links are increasing, attracting more companies,” said Suren Goyal, Partner, RPS Group.
Dr. Ananth S Raghuvanshi, President, NAREDCO Mahi said, “Commercial real estate seems to be reaping the rewards through increased demand amid instances of financial expansion, which could result in an increase in rents as well as property prices. Is. Unlike residential homes, commercial buildings often have longer lease terms and regular rental revenue. This is often seen as insurance against inflation, given that rental costs are likely to rise along with inflation. This type of real estate investment can help diversify an investment portfolio. The rise in co-working space requirements has led to a good acceptance of commercial spaces. In addition, where commercial land use allows mixed use, there is also a growing segment of studio apartments, senior living and student housing depending on the location.
“Long-term property appreciation can add value over time, potentially generating substantial profits when the property is sold. However, investing in real estate requires a large amount of capital and has ongoing maintenance costs, Dr Ananth added later. It is important to do thorough research and consult with a financial professional before making any investment decision, 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.
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