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9 Things about Buy Commercial Space in Noida You May Not Have Known

Investing in a commercial space in Noida is a big speculation, which is the chief reason why commercial real estate remained an asset class investment that only big investment houses or high net worth individuals could afford. However, that scenario is changing. Today, retail investors are the game changers, as they are getting into the commercial space game.

Not many of the World’s commercial space markets have experienced such a sensational and fast change in such a limited span of time, as Indian market space has. The coming few years will see a substantial boost in the both services and knowledge zone, unlocking humongous opportunities for retail investors.


Routes to investment

There are 3 ways to invest in commercial real estate –
  1. Direct buy from a developer
  2. Buy commercial developer’s share from stock market
  3. Invest in REITs (Real Estate Investment Trusts)
Many real estate developers, particularly in urban areas like Noida, are offering their investors small units with areas between 500-1000 square feet in Grade A buildings given the pressure on pricing and higher vacancy. In comparison to the scenario that was common a few years back, situation of today is almost just the opposite. Earlier the market has larger units available for investing, which obviously were out of the league for the retail investors. Retail investors of today have multitude of investing options in shops in malls or high street outlets.

Advantages of investing in smaller units –
  1. Easy renting
  2. Small units can be used for personal use – For professionals like lawyers, doctors, stock brokers and auditors
While investing, even in small units, the investor must focus and select investment market with a sundry economic base, huge tenant base and tenants with taste for quality buildings. If you are looking at investing in under-construction property, it is important to check the reputation of the developer, his track record of delivering projects with promised quality and schedule.

9 Things about investing in commercial space that most retail investors are not familiar with -
Even though the real estate market has a lot many rationally priced options for its retail investors, investing in a commercial space is no child’s play. It requires critical thinking, market study and planning.

  1. Buyers should establish the worth of the location along with its demand and supply dynamics. It is important to engage in adequate research or you will end up investing in a micro-market that has or might have high vacancies. 
  2. It is important for the buyer to ensure that the economy, future infrastructure development, population growth and job market is wholesome.
  3. It is important for the buyer to check the credentials of the developer.
  4. It is important for the buyer to check quality of property management in the project and property’s access to public transport.
  5. It is important for the buyer to take knowledgeable advice and assistance from a registered real estate agent and a lawyer for best deal and property’s due-diligence.
  6. For investment to a retail store, it is important for the buyer to take into account the face of the unit, foot-fall and the retail dynamics of the neighboring catchment
  7. Retail investors investing for their personal use must ensure that the amenities promised by the project meet their business needs.
  8. Retail investors investing for returns must look at – the vacancy factor and break-up of cash flows.
  9. Whether for renting or for personal use, the investor must consider expenses such as – property tax, building insurance and maintenance along with lock-in period, lease term and expiry dates.

Keep in mind, you don't just earn profit on the sale of appreciated commercial space – the monthly rent of a well-located shop or office space is also substantial. For commercial property, the income generated determine its worth. As such, the capitalization rate is the ratio between the net operating income produced by the property and its original capital cost or current market value. The investors who does their homework well or take advice from a reputed source, buying a commercial space is a high-return and high adrenaline game that any other investment option cannot hold a candle to.

For more information, feel free to contact and explore https://www.anthurium.in/building/
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