Commercial real estate has been traditionally seen as an asset class dominated by institutional investors and heavyweight HNIs. This concept is changing as small investors and even professionals such as doctors, auditors and lawyers are purchasing commercial properties for investment and self use, in the backdrop of a multitude of affordable options. In such a scenario, the prospective buyer needs to conduct profound research for appropriate decision-making, opine experts.
A recent poll conducted by ConstructionBiz360 echoes similar opinion as 67% respondents feel that commercial real estate investment requires thorough research, planning and prudence. However, 33% respondents of the survey did not have an opinion to share.
Ramesh Nair, managing director (West India) at international property consulting firm Jones Lang LaSalle India, says, “Despite the availability of more rationally priced options, investing in commercial real estate is most definitely not a child’s play. It requires forethought, research and planning.”
Criteria to look for
According to Saurav Ranjan Datta, marketing head (Retail and Commercial) at Shriram Ozone Group, a reputed real estate company headquartered in Kolkata, “Tremendous opportunities, affordable options and huge returns are driving commercial real estate space purchase in India.”
Interested commercial property buyers need to do a thorough research of the location and its demand/supply dynamics, prior investment. If they do not engage in sufficient research, they may end up buying into micro markets that have or will have high vacancies, advises Mr Nair.
Other experts suggest investors to ensure the economy, job market and population growth in the market is healthy. There is also a need to check the developer credentials, assess the potential for infrastructure development in the particular area, ensure access to public transport and project quality standards.
Giving tips on good retail space purchase, Mr Datta said that buyers need to consider the frontage, foot-fall and the dynamics of the adjoining catchment. Furthermore, if the investor is the entrepreneur then he/she should ensure that the amenities in the project match his/her business needs.
Consulting a knowledgeable real estate agent and an ace civil lawyer can act as bonus and facilitate closing lucrative deals.