When it comes to property buying, people in India often get confused as to which property will raise the bar in terms of better returns- Residential or commercial? To be precise, commercial property has always outperformed residential properties in terms of rental inflow as well as capital appreciation. For instance, the rental yield on commercial properties is around 7%-9% whereas when it comes to residential properties, the rental yield is just 1%-2%. Also, nowadays commercial real estate has been a favorite asset class of numerous investors. Commercial properties come with ‘spend less earn more’ benefits.
Investment opportunities in pre-leased commercial properties give an opportunity to earn bulk rental income from quality tenants that include MNCs and fortune companies. The tenure period of these quality tenants is generally for long terms which ensures a steady passive inflow. According to estimates, India's real estate sector will contribute 13% to the country's GDP by 2030, up from US$ 200 billion in 2021. Commercial real estate, hospitality, and retail are all expanding rapidly in India, providing a much-needed infrastructure.
The increased engagement of FDI (Foreign Direct Investments) in the top metropolitan cities of India is targeted toward the commercial real estate of the country. Many MNCs have contributed huge investment amounts to build data centers, IT parks, business spaces, etc. The pre-leased commercial property loans give a chance to build leverage by keeping your rental receipts as mortgage to the bank. With these advantageous aspects of commercial property investments, there are many things that one can benefit from through commercial real estate investments.
This article explains well how commercial real estate has in for its investors and why investing in one can transform your wealth from better to best.