Perhaps you at present rent a shop or
need to bring diversity to your investment portfolio; either way retail space
in Noida is one of the biggest and most diverse sectors of commercial real
estate market and definitely well worth to have a look at.
First and foremost, it is important to
understand ‘what actually is retail space industry?’. Put simply, the
properties that are used exclusively to sell and market consumer goods and even
consumer services are known as the retail properties. The range is vast for
retail spaces – shopping centers, pop-up shops, individual stores, big brand
showrooms, super markets, cafes, pharmacies, fashion stores, dry-cleaners,
florists, etc. all come under retail real estate.
Key benefits of investing in Retail spaces
1)
Significant returns – People are often pulled in towards
investing in retail owing to the high yields that it offers. Returns or yields
is a percentage figure, calculated by taking the yearly rental income of a
property and dividing it by the total amount that has been invested in that
property. Investment in retail spaces typically earn its investors yields of
6-7%, which is great for investors like retirees, looking for an income-stream
based investment over capital gains growth, which means increase in the
property value that obviously takes time.
2)
Long leases – In contrast to residential leases,
leases in retail real estate industry are usually for longer period of time,
may be 5 years and more. Long term of leases are beneficial for both tenants
and the landlords; tenant will get sufficient time to establish his business
and landlord will get security and regular income. Apart from regular incomes,
landlords are also benefitted with annual rent increases, which are as per the
CPI or the consumer price index.
3)
Low to nil maintenance – For most retail leases done with
good brands and reputed businesses, these are net leases, which means it is the
tenant who will bear most of the costs like – utility bills, maintenance costs,
insurances and even in some cases the real estate taxes as well. For that
matter, most industry Gurus advice business owners to buy their own retail
spaces, as owning a property has a lot many benefits, like – inclusion of an
asset, tax benefits, etc.
Reasons
for caution and solution for retail property investment
Since, we have already discussed the
major benefits of retail space investment, it is important that we should cover
the risks that revolves around the same and along with the risks, what
solutions can save you from the pitfalls –
1)
Retail industry is tough and sensitive
market - The retail
business is exceptionally sensitive towards the economy, for a failing economy
it is the retail sector that suffers the most leading to loss of businesses. In
such situations, property owners may face long vacancy periods. Hence, it is
important that you invest with a good property that remain occupied throughout
the years. However, at times when economy downturns, it is good to play safe
and offer incentives like – reduced rents or renovations to attract and retain
tenants.
2)
Retail is an expensive investment – The major aspect that add to the
cost of the property is the Location. Investing in retail spaces that are in
the heart of the city is both needed and expensive. If you want to earn high
yields and want to keep yourself protected from long vacancy periods that you
must invest in property that is at the prime location and anything that is
available at prime location will come at prime price.
Who puts resources in retail property?
As mentioned in the above paragraph,
the range of retail properties is vast and similarly it attracts a diverse
range of investors, which typically include – private buyers, foreign
investors, big business houses and property trusts
Now that you have read
all about retail space industry, your next step should be to find such a
property. Like we made it easy for you to know about the benefits and pitfalls
you should be aware of, we are making it easy for you to find a property as
well- Just invest with Anthurium, sector-73, Noida and you will have your
resources put in a successful and rewarding retail space. Anthurium
offers its investors with various types and sizes of retail spaces under one
roof.
If the above information interests you and you have any plans of
investing in retail spaces in Noida, you must visit the project Anthurium
personally or explore the website at https://www.anthurium.in/
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