How to make prudent choices when it comes to Commercial Investments

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How to make prudent choices when it comes to Commercial Investments

As we discuss about real estate investments, the first thing that comes to our mind is commercial property investments which yields better returns as compared to residential and provides a long term asset value. Not only is the rental yield high through it but also the commercial market is predicted to remain robust with about 35 million sq. ft.* of average absorption in the next couple of years.

In India, the average rental yield of commercial property varies between 5 to 9 %*. Of course, there are several factors responsible for it like, geography, brand, demand-supply dynamics etc. What also matters is the type of property, like shop, office space, institutional & warehouse spaces. For a premium location, the average return can go as high as 10 to 12%. But if the property is associated with a reputed and globally trusted brand name, it might yield even more rental. As in the case of WTC buildings across the globe, it enjoys 30% higher average rentals than others. With a commercial property, the lease is generally signed for a minimum period of 9 years, thus giving a surety of regular returns. And in the lease agreement, there’s also a escalation clause for increase in rent by approximately 10%, every 3 years which makes it a win-win situation.
By now, we all stand to the fact that investing in a commercial property means a good bargain but, before jumping onto anything, let’s have a deeper insight at some of the best practices for commercial real estate investment:

1. Higher Occupancy Rate: It is always wiser to invest in branded and premium properties that have higher occupancy rates. Ensuring this would mean that the demand is consistent and hence can construct a strong portfolio of cohesive and complimentary global MNCs. Branded properties like WTCs enjoy superior occupancy rate with an average of 13% more than other properties. Talking about WTC Noida, it’s first phase (Tec I and Tec II tower) got leased to VIVO from day one with 100% occupancy and is a demonstration of the demand that the branded complex will generate.

2. Brand & Innovative Architecture Matters: Brand is a significant part of the realty industry as it yields trust. The name WTC is significant because this magnanimous brand is sprawled across 326 cities, 89 countries and is the one-stop destination for the Fortune 500 companies. Catering to the international business community over decades, WTC buildings are innovative, modern and highly sophisticated in its architecture. The buildings are designed keeping the principles of climatology and landscape planning in mind. Green features such as power-saving measures, recycling natural resources such as water, solar powered systems and the use of environment-friendly building materials are the key attractions.

3. The equation of demand and supply: The world over, wider and better streets are associated with well-functioning transportation system. Likewise, the accessibility of the metro makes travelling convenient for everybody, be it residents or business people . Because of the quick development in framework, Noida has turned into a financial hub for commercial property dealings. Major corporate workplaces of global organizations are coming in this city with ample scope for business opportunities through WTC Noida. Noida is clamoring with shopping centers, banks, ATMs, hospitals and so on, making life advantageous for individuals living and working here. Noida is a thickly populated zone and it draws in a noteworthy footfall. The city is, for this reason, is a dynamic choice for an effective commercial venture. Such territories make a gigantic interest for business or retail expansions and indicates a high rental and great capital returns.

4. Invest in ready-to-move properties: A ready-to-move resource induces the customer of a “zero” waiting period for the ROI to start. It likewise furnishes the customers with an unmovable rental income and gradual capital appreciation. Because of these focal points, investors prefer to invest in a pre-leased property over unleased properties. With respect to rental output, WTC buildings enjoy higher rental returns in comparison with other non-WTC properties in the vicinity. . Because of this, an investor prefers investing in the pre-leased properties as it provides short term as well as long term benefits.

5. Tenant Talks: Whenever you are looking for a commercial investment, look for the projects with good MNCs as an occupier who can bring in more business and goodwill. In this context, WTC Noida is home to a global brand, VIVO which is the fifth-largest mobile manufacturer globally. WTC Noida have access to global counterparts in 89 countries and the dedicated leasing team custom tailor the needs of individual businesses and investors which attracts demand.

 

 

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