Why commercial real estate is emerging as the best investment option? Details
In times characterized by financial instability and erratic market conditions, savvy investors are always looking for ways to grow and protect their assets. In these circumstances, commercial real estate has emerged as an attractive investment opportunity, offering various benefits and the prospect of long-term prosperity. In recent years, business ownership has emerged as one of the most profitable investment opportunities. Explanations for this growth are numerous, from the prospect of 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 looking for a profitable outlet capable of withstanding economic swings due to its excellent returns, stability and diversification benefits.
Let’s take a look at why commercial real estate is being viewed as the best investment option in today’s market, according to some of the brightest minds in the industry.
According to Nakul Mathur, MD, Avanta India, “Commercial real estate has gained prominence as the most preferred investment option as it offers better returns on investments. Offices are the most sought-after investment vehicle within the commercial segment, The trend is set with co-working spaces. The sector is witnessing a healthy business boom with strong demand from IT-ITeS, BFSI, law and boutique firms. Flexibility becomes the key word in the commercial real estate sector. is, and hybrid workplaces are attracting companies. In the future, there will be more focus on providing flexible office spaces that meet the demands of evolving work patterns and allow companies to modernize in a safe and secure environment. Help reduce your operating costs by investing in spaces that come with operational needs.
“A wise investment is essentially one that is not only a safe bet but also gives high returns, commercial real estate ticks all the boxes when it comes to wise investment options. Many factors contribute to this fact, major ones being capital appreciation, long lease tenures, favorable government policies etc. Commercial properties promise real capital appreciation over a period of time. As the demand for commercial real estate increases and urban areas grow, property values increase, allowing investors to make substantial gains on divesting their assets,” said Mrinal Mittal, Director, Blacktech.
In addition, the Government of India has implemented a number of 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 a lucrative investment option. The government’s emphasis 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, leading to high demand for commercial properties.
“Commercial real estate has emerged as one of the best investment opportunities in India, due to the increasing need for workplaces, stores and industrial spaces. Considering the prosperous economy of the country, firms are growing rapidly, requiring more spacious and better-equipped premises, which has led to a massive increase in the patronage of commercial properties. Additionally, recent initiatives by the Indian government have made the industry more transparent and structured, resulting in attractive propositions for both foreign and domestic investors alike. Considering the growing size of the Indian economy, commercial real estate offers significant potential for capital appreciation as well as consistent revenue flow. The industry is constantly evolving, and the 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 appears to be rewarded by increased demand amid conditions of fiscal expansion, which may result in higher rents as well as property prices. Unlike residential homes, commercial buildings often have lease terms and regular rental income. This is often seen as insurance against inflation, given that rental costs are likely to rise in line with inflation. This type of real estate investment can help diversify an investment portfolio. Commercial space has received good acceptance from the increase in co-working space needs. Additionally, where commercial land use allows for mixed use, then studio apartments, senior living and student housing are also a growing segment depending on the location.
“Long-term property appreciation can increase the value over time, potentially yielding a substantial profit when the property is sold. However, investing in real estate requires a significant amount of capital and ongoing maintenance. requires an expense,” Dr. Ananth said later. 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. All in all Thus, real estate can be a valuable addition to an investment portfolio for those who are willing to take on the risks and responsibilities involved.
Also Read: Adani Group Repays USD 2.65 Billion Debt To Complete Prepayment Program
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