Commercial Real Estate is the Future of Smart Investment
The first thought of investment, real estate comes to mind in Indian investors. This is because this segment is generally considered a safe side for investment. Over time, commercial properties have gained attention and consumers are more eager to invest in commercial real estate.
Commercial real estate: A viable investment opportunity
Commercial real estate an essential component of the real estate industry, typically includes business, retail, and office space. The pandemic significantly impacted the real estate and commercial sectors, especially in 2020.
The market is now growing at a rapid pace and according to Modern Intelligence, the Indian commercial real estate industry is expected to grow at a CAGR of 13% from 2022 to 2027. With this growth, investment in commercial sectors is also increasing.
Apart from these, the shop cum office concept and Deen Dayal Awas Yojana are other factors driving investors to invest in commercial space.
Shop cum Offices: A booming concept
The Shop cum Office (SCO) concept is an initiative of the Government of Haryana. Under this model, both commercial space and offices are set up in the same building, especially in prime locations.
They are freehold plots where basic infrastructural facilities are provided and can be built and customized as per the wishes of the investors.
The owner has full ownership rights of the land. Properties like banks, health centers, retail shops, cloud kitchens, food joints, etc. are on the lower floor and offices are on the upper floor.
The footfall in such properties is huge. At the same time, capital growth is optimal, the lease rental stream is stable and the risk level is comparatively low. Hence, both developers and investors benefit from investing in such places.
This is the latest trend that is driving the commercial real estate segment. The Commercial Plotted Colony Policy of the Government of Haryana plays an important role in furthering the SCO segment.
Buoyed by this plan, developers, especially in Gurgaon and Faridabad, are pushing this concept as a property in the real estate segment. Various investors are now seeing SCO as a sought-after asset class to diversify their portfolios.
Owing to its various advantages and bringing together both retail and offices, this segment is attracting the interest of investors in the commercial real estate segment.
Deen Dayal Jan Awas Yojana is an affordable housing scheme launched by the Haryana State Government in November 2016.
It is an initiative that aims to encourage the development of high-density plot colonies in medium and low-potential cities of Haryana.
It aims to achieve the goal of ‘Housing for All by 2022. Affordable housing colonies are being developed by private developers under the supervision of the state government.
They are being built at a prime location as the area is well connected to Delhi through NH8, Southern Peripheral Road, and Sohna Road. Cyber City, Golf Course, Sohna as well as Hospitals, Hotels, Retail Stores, Educational Institutions, etc. All are in close proximity.
While the colonies are under construction, other facilities like a gym, cafe, snooker lounge, yoga deck, sports area, restaurant, etc. are also being constructed. This is another reason why commercial real estate is booming and investors are keen to invest in this scheme.
Another prime example of the Commercial Real Estate segment being a viable investment option is the fact that Southern Peripheral Road (SPR), is attracting investor attention.
This 845.5 crore project is expected to be a game changer for the real estate sector. The primary reason is that it will directly connect Golf Course Extension Road and NH-8 plus Sohna Road.
Apart from this, various commercial projects including IT Park, Shopping Mall, Shop cum Office, etc. are also being built.
Once completed, it will not only give a boost to the real estate sector but will also be a place of investment for investors. According to research, a total of 3500 units of SPR were available by the second quarter of 2022. Of these, 2900 units are under construction.
The project has recently received investment and approval for redevelopment which is expected to be completed by 2025. This investment news is not only creating a buzz in the real estate industry but is also attracting high investment for the project.
Future scope of commercial real estate
When considering investments, commercial properties today have an edge due to several reasons. Higher annual rental appreciation, lifetime property value, and greater long-term returns due to increased demand are all major benefits of investing in Commercial Real Estate.
Driven by the rise in hybrid work models, the shop cum office concept is attracting investor interest. In addition, the construction of Southern Peripheral Road and the Deen Dayal Jan Awas Yojana scheme is giving further impetus to CRE investment. For these reasons, commercial real estate is slowly emerging as an ideal investment source!