Good time to invest in Commercial Property
Investing in commercial property gives you the satisfaction of ‘having the cake and eating it too!’ The way things have moved for Commercial Real Estate (CRE) in the last couple of years is enough to prove this point. Investors can enjoy the benefits of leasing out the property while gaining from capital appreciation. Across major cities of India there are very low vacancy rates with respect to CRE.
A report by Collier International on India office trends in 2016 observes that: - Occupiers across all sectors will continue to become more space efficient, doing more with less space as their leases come up for renewal. - Grade A office space, rents are expected to strengthen for quality office space in almost all the micro markets. - Government support with major policy level changes, such as Real Estate Regulation Bill, Land Bill, GST Bill are expected to favour real estate sector.
Indeed the RERA and GST are two Bills that everyone is looking up to! They have succeeded in generating a positive sentiment among the consumers and investors and also the real estate players. Though the implementation may take some time, it will definitely boost the overall real estate industry. These and other things are playing catalysts in lifting the lull that had loomed over the last couple of years on the real estate sector.
A strong demand for office occupancies is exhibited by top Indian cities with Bengaluru topping the market in the 2015. While a strong demand in office occupancy was seen in both Mumbai and Pune the IT and ITeS remained as prime drivers for Pune’s CRE. Mr. Pradeep Runwal, MD, Runwal Reallty observes, "There’s also a growing demand from banking and financial services, Banking, Financial services and Insurance sector (BFSI) and e-commerce firms."
Moreover demand of Grade B projects has also increased significantly in Pune in the last couple of years. Limited availability and relatively higher rents in Grade A projects has shifted the focus to grade B properties. This means a good time for Grade B projects too!
According to an article recently posted by Real Estate specialists JLL India, in the first half of 2016 the total of Private Equity inflows into office realty (IT and Commercial) has already crossed the annual figures of 2015. The high net worth investors in Indian Real Estate Market (both domestic and overseas) are predicted to invest aggressively in the profitable commercial property market scenario. If you are among those who want to keep up with the flow of tide and have the resources to pitch in a decent amount, then it is needless to say that it is a good time to buy in Commercial Property!