India’s commercial real estate market calls for investors

Commercial real estate offers rental yields ranging from 7.5 to 10 percent

The Indian economy is one of the fastest-growing in the world, and its position within the global economy is likely to strengthen in the future. 

Experts believe now is the right time to invest in commercial real estate because of its sound long-term prospects. Vishal Ahuja, head of private wealth group at JLL India, shared with Business Standard that “WFH had created uncertainties in investors’ minds. However, companies are now looking at a hybrid work environment which means the office is an integral part of their plans. This has led to resurgence in investor confidence.”

“The market is definitely looking upbeat with leasing activity gaining momentum across the top seven cities in 2021. While many offices have already opened, many more are likely to open sooner or later. Hence, this is a good time to invest in commercial real estate,” agreed Anuj Puri, chairman at ANAROCK Group.

Some locations investors can look into include Bengaluru, specifically Outer Ring Road, Electronic City, and Whitefield. In Hyderabad, HITECH city and Gachibowli are top destinations. Additionally, there are areas in Chennai and the Mumbai Metropolitan Region that are gaining momentum.

Commercial real estate offers rental yields ranging from 7.5 to 10 percent as compared to residential properties, which yield only 2 to 3.5 percent. Furthermore, long-term leases produce predictable cash flows.

More: Indian real estate industry on the road to recovery

The Times of India reported that India’s commercial real estate market has been gaining momentum since last year. Gujarat has been attracting young professionals as this has seen an influx in startups, which means better career opportunities.

Based on data collected by the Gujarat Real Estate Regulatory Authority (GRERA), new commercial project registrations in Gujarat went up by 24 percent to 213 this year compared to last year’s 171.

Ahmedabad had the highest increase in registered commercial projects in the state with 76, which was a 17 percent increase from last year.

Knight Frank India’s executive director, Balbir Singh Khalsa said, “As industries and corporates are bullish on expansion plans, the need for commercial property has gone up. This includes office space as well as retail and showroom spaces…”

The Property Report editors wrote this article. For more information, email: [email protected].