One of the most considerable stresses of grown-ups in today’s world is unemployment and job insecurity. While the unemployed are worried about finding the best job, job insecurity is the greatest threat of many who currently earn in 6 digits. The golden proverb “Make hay while the sunshine” hits the minds of many of us as a solution to beat the nightmare, but we are still in the confusion of finding the right choice for wealth management and to earn a passive income. While saving a part of your income is a risk-free plan that will give hands in situations like medical emergencies, investing is a wise choice to multiply your wealth and to stay stress-free of the economic changes.

Commercial Real Estate- A Mindful Choice of Investment

Have you ever noticed the changes on both sides of your way to the office? How many new offices, retail shops, shopping malls, beauty parlours, hotels, and other commercial buildings have raised within a year? With globalization and the industrial revolution, commercial buildings and office spaces are growing to meet the demand of growing India. So why not invest in that niche to grow your wealth? CRE (Commercial Real Estate) is a valuable choice to invest your wealth in the growing niche for risk-free sky-high returns that make your path towards financial stability and improved lifestyle easier.

CRE Market in Bangalore:

According to the Economic Times, Bangalore commercial property market is the 5th fastest growing in Asia, and in the second quarter of 2019, the lease rentals witnessed a rise of over 9.4%. Mumbai and Delhi were ranked 8th and 12th in Asia. Bangalore, known as the IT hub of India, is a truly cosmopolitan city where people from all over the country live. With many multinational IT companies operating in Bangalore, it is also a dream spot for merging entrepreneurs to start their career in their dream passion. The pleasant climate, potential clients nearby, transportation facilities, excellent residential facilities for employees, and amenities nearby make Bangalore the choice for many to set up their office and relocate their old one. With the high demand for commercial buildings in Bangalore, more and more investors and NRIs are planning investment in Bangalore CRE market.

Booming CRE Sectors in Bangalore:

Office Spaces:

Bangalore, the Silicon Valley of India, is a place filled with popular IT companies like Wipro, Infosys, Accenture, TCS, IBM, Oracle, Cognizant, and many more companies that serve as the starting point in the career of many successful techies. These companies are ready to spend a significant portion of their income, creating the right place for their employees to attract the best techies to their firm. Investing in office spaces has several advantages as these tenants love to have larger spaces with meeting rooms, luxurious reception areas, and cafeterias. These tenents enter into the long-term rental agreement due to staying away from rising market prices, limited properties that suit their need, and difficulty in the frequent shifting of offices.

Industrial Premises:

Karnataka contributes to 20% of the garment production across the country. It has numerous heavy and light industries in all niches, including pharmaceuticals, cement manufacturing, biotechnology, steel, food processing, and many more. Being home for various industries, many of the suppliers and vendors are eagerly searching for economic spaces for setting up new or shifting their old manufacturing unit to Bangalore as it will greatly reduce their goods transportation expenses. No doubt, planning to invest in the Industrial CRE market will prove advantageous, especially in Bangalore. Moreover, you can stay peaceful as Industrial owners hate shifting their manufacturing units, unless for a valid reason. Stay calm and assured of long-term returns!

Retail Shops:

Bangalore has pulled in many people from all around the county and all social status levels as residents. With a total population of 12.3 million, Bangalore has a rising demand for retail shops and commercial showrooms every day. From small shops to a cluster of shops in the sky-scrappers, the number increases day by day, making retail shops a wise choice of CRE investment in Bangalore. Retail CRE is a choice in Bangalore where you can decide to invest smaller or larger sums depending on your needs, and you are assured of reaping higher returns.

Hotels/ Hospitality Properties:

The Restaurant and Hotel industry is an evergreen industry in Bangalore. According to an article published in DeccanHerald, Bangalore is expected to beat Delhi and Mumbai in the next few years. Being a cosmopolitan city, various restaurants seek the attention of its residents and are a place of a party, get-together, and weekend getaways in Bangalore. Smaller restaurants are equally growing as many bachelors prefer them for their daily meals. While thinking about investing in real estate in Bangalore, Hotels/Hospitality have provisions for investors of every budget level.

Commercial Multi-Family Properties:

With more industries and companies, more and more people from outside the state shift to Bangalore, resulting in a high-demand for commercial, residential buildings like apartments, duplex, townhouse, flats, and condos. Unlike residential properties, commercial multi-family properties will keep you from the risk of a single vacancy and have higher Capital Appreciation. If you are the one who loves to invest in Bangalore’s residential properties and have higher investment, commercial multi-family properties would be the right to go.

Special Purpose Properties:

If you are looking for some other exciting yet assured way of wealth investment, then you can consider special-purpose properties like amusement parks, parking areas, nurseries, and other properties that attract you. In cosmopolitan cities like Bangalore, where uncountable vehicles ply every day, amusement parks and parking lots will never let you down in gaining profits.

Like any other investment plan, investing in the CRE market needs a little planning based on your current income, expected growth, and risk factors. As the CRE market varies from place to place, it is always good to consult a CRE advisors/consulting service to take the right step towards success. It’s never late, plans your best way to invest your income and ensure your future financial safety and inner peace.

FAQs:

Valuation of the property means to find out the market value of a certain commercial or residential property taking many factors into account like demand and supply, type and quality of the property, location, infrastructure and many more. This is also compared to other properties in the area which have been bought or sold to estimate he valuation of that specific property. This advantageous in ascertaining the true value of the CRE or residential property if there is a need to buy or sell it.

Tax implications are sound of the property becomes a long-term capital gain and the owner does not transfer the ownership or sell the property for three years of its possession In case he does, then it will be considered as a short term capital gain and the income tax exemption under Section 54F of the Indian Income Tax Act, 1961 will not be applicable.

No, it is considered illegal to use a commercial real estate property as a residential area. It is strictly to be used only for business or professional purposes as stated in terms and conditions. However, with a few conditions, a residential rea can be used for professional and commercial purposes provided there is no complaint registered against the owners about it.

There are a number of factors to consider before purchasing a commercial real estate from a seller like a company, but one of the most important factors is to do a thorough investigation and verification at the Registrar of Companies to understand the position of the property. The primary consideration is to find out if the CRE has been mortgaged or if it’s being used as collateral security against any underlying debt or loan, else this will not be considered as a freehold property and it would not be wise to buy it.

There are two categories of people involved in a leasehold property – lessor (owner) and the lessee (with whom the property has been leased/mortgaged with). In this situation the lessor needs to pay a certain amount of money in a stipulated time period to the lessee as a premium or annual payment and any kind of transfer of ownership of this particular property needs prior permission. A property is a freehold property when the ownership is 100% with the owner and there is no lessee, or the property is not used as a security or collateral against any debt. This is registered as a freehold property and the transfer of ownership can be done freely as the owner is not under any liability to pay off to another person or to take permission.