Retail Space in commercial property a Profitable Investment Option?

Retail Space in commercial property is rising as a very popular form of investment in India. Not only the Resident Indians but the NRIs are also putting their money in retail realty in prime commercial locations of India.

Let us learn more about retail space commercial properties in India and why they are so profitable.


What is Retail Real Estate?

Retail real estate basically means the shops. When you invest in a retail space, you are buying a shop in a mall project or in a mixed-use real estate project. You will pay only for the said unit, just like an office space.

While investing in retail, you need to look at many factors, the most important of which are:


     — Centrality of the location

     — Layout of the shop

     — Neighbourhood dynamics

     — Catchment area of the property

     — Rental trends in the area

     — Commercial trends in the area

     — Laws related to retail spaces prevalent in the location



What makes retail space in commercial property a profitable investment venture?

As compared to housing projects, commercial real estate units give higher returns on investment and they are also a great opportunity for earning a regular income.

Among commercial realty options, retail properties come out as the showstopper. Given below are a few reasons why retail real estate is preferred by avid investors:


1. High Rental Yield


The rental income from retail real estate is the highest as compared to any other type of commercial property. This is because of the high demand for such properties. If you own retail property in a prime and bustling location, you will make excellent money in the form of rental.

Moreover, retail tenants usually agree on covering the cost of property maintenance and sometimes the taxes as well, thus putting some more load off of your chest.

2. Exponential Appreciation


The appreciation in the value of a retail real estate is much higher than office spaces or industrial units. Again the high demand in the market leads to such profitability.

While a housing unit would give you a 3-5% return on investment, the ROI on retail realty may go up to 10% of its value. This is an amazing figure to bank on.

3. Longer Lease


Shop projects generally have a longer lease than residential real estate and office spaces. So, with retail realty, you can enjoy your returns without having to renew your lease every 3 years.

4. Minimum Chances of Idle Property


If you buy an office space and market it, you would definitely get multiple queries from different types of businesses. But it is difficult to find the right tenants. Even if you do, they tend to move sooner.

On the other hand, retail properties are easier to put on rent and they also attract long-term lessee, especially if your property enjoys an impeccable location.

Hence, we can see that retail space in Noida can be extremely profitable if invested wisely.

At the same time, retail space in commercial property investment is quite a risky one. You will have to see the economic conditions in the country and its trends to find out how the future of this investment is going to be. Look for quality retail spaces by renowned builders, preferably in a township project or a mixed-use project. These happen to be safer alternatives to standalone retail stores.