Commercial Real Estate Investment In India

Commercial Real Estate includes properties used to conduct business out of. They are office spaces, as opposed to living spaces.

 How to get involved with Commercial Real Estate?

During times of inflation in the current equity market, people tend to live off the happiness from rising rates. The feeling that the good times will last forever tends to overpower the pragmatic thought that market cycles get the better of those that are not careful.

If you’re wondering whether you should invest in Private Commercial Real Estate right now, consider the following as advantages of the current commercial real estate market:

  1. There are limited spaces in India for grade A development. MNCs that wish to optimize their business thus find that there is a lot of scope here. They carry out the planning phases of future projects in India, which has resulted in high demand despite the pandemic. This means low vacancy rates and higher profits for those that invest in Commercial Real Estate.

  2. The Indian demographic makes it possible for Commercial Real estate to flourish. While most populations abroad have grown accustomed to the work-from-home culture, the Indian population, the majority of which is those below the age of 25, still demand in-person services. They value urbanization and the high population density and different living arrangements make commercial real estate a stable investment even during unprecedented COVID times. It remains an outperforming asset relative to other investment options.

  3. While other investment rates such as fixed income, debt, and FD products dropped to 5 to 6% since the COVID first wave in India, rental is stable at 8 to 10% in commercial real estate. The hard underlying assets and lease agreements with MNC tenants can ensure that investors have a smooth sailing ride until the country survives the pandemic.

Like with any sector, the ideal time to invest in commercial real estate is during its growth phase. In India, the commercial real estate market is seeing rapid growth. If one invests now, their yields will be higher than if they were to invest in an already matured market. While the world’s largest funds have their maximum allocations invested in Indian properties like Brookfields and Blackstones, participating in asset class investment would allow one to reap the most benefits from growth, while enjoying the upside of stability and return on investment.

The best places to buy Commercial Real Estate right now are Mumbai, Delhi NCR, Hyderabad, and Bangalore. You can choose to get involved in two ways, depending on the funds available at your disposal and your future investment plans. You can invest in Commercial Real Estate through fractional platforms or by direct property purchasing.

Commercial Real Estate Investments have become more popular in recent years Lenders are opening up to tenants that have commercial intentions, finding that these are less risky than residential projects. Parallelly, as businesses grow and more start-ups emerge, the demand for office spaces and warehouse facilities also has been increasing.

Return profile of residential and Commercial Real estate

When it comes to being more lucrative, commercial real estate properties take home the prize. Investors enjoy higher rental yields, which are between 8 to 10% in commercial properties as compared to residential properties where the return is simply about 2 to 3%. If you are able to identify and pick the best Commercial Real Estate investment in a desirable neighborhood, it becomes a  great long-term holding.

 The barriers to Commercial Real Estate -Investors perspective

  1. While investing in real estate, one gets the option of investing within a variety of different ranges. The smaller amounts are more common. Yet, these smaller amounts are quite high, too, and can range from between 25 lakhs to 1 crore. For a commercial space that is roomy enough and can fit enough facilities, an initial investment of at least 50 crores would be needed, which can be a challenge.

  2. You can induce the real estate market. Marketing is an important aspect of being able to sell properties and getting people interested. Informing about specificities is another skill to master. But Commercial Real Estate investing requires an emphasis on building reliable relationships and creating opportunities through them. Myre capital shines through for that occasion.

Due to these factors, the average retail investor gets fewer opportunities to gain access to the market. With lower access to CRE funds, institutional investors and high net-worth individuals take the lead in bringing the primary investors.

Why should one invest in a CRE?

  1. Many businesses shut down because of COVID and this trend seems to be one that might continue for a while. At the same time, equity markets are booming because they provide high returns on investment. It seems counter-intuitive to do so, but investors invest their money in the hope that things will pick up and result in high rewards.

  2. Since inflation is at the risk yet the equity market is not furnishing adequate returns, people are beginning to diversify their investment. Historically, real estate has proved a stable option. Commercial Real Estate investing holds its forte against inflation because it regularly provides a steady rental income. This rental income might balance out any losses incurred from failed investments in other asset classes or equities.

  3. The monthly cash flow that comes in from rent payments on real estate qualifies as a wealth product. Investors end up making huge sums as the best way to invest in Commercial Real Estate in the long run when they choose to retain and maintain their properties for long times after purchase instead of selling them off when market rates are high.

  4. If investors decide to hold a long-term lease, they can benefit from high yields up to 8 to 10% purely from the rental income. Compared to investing in Fixed Deposits, real estate property investors can earn about double their investment.  

Why Myre Capital?

If you have ever invested elsewhere, like in equity or debt, for instance, the process of investing in Commercial Real Estate will be totally familiar to you. If you’re a beginner and want to test the waters, Myre Capital is a platform that takes care of everything for you. With a few important documents needed for verification, you can begin securing your future in less than 20 minutes, all from the comfort of your home!

Although integrating technology into Commercial Real Estate has been faced with some hesitance, fractional ownership platforms like Myre capital eradicate barriers to entry, allowing big and small investors to participate. Users on the  Myre Capital platform get access to Grade-A properties and consult managers throughout their investment process.

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