Pre leased commercial properties tops the list for investors
Investment in pre leased commercial properties has gained traction in India in past few years. In the current scenario, investors are finding a decline in fixed income products like Term Deposits, Bonds, etc. In post-pandemic times both foreign and domestic investors, UHNIs and HNIs are actively investing in this asset type. Investing in pre leased commercial properties would earn equity value along with capital appreciation earned on the escalated rent. Henceforth the investors can earn good returns; from pre-rented commercial properties.
What is a pre-leased property:
A pre leased property denotes the one that is sanctioned to an organization and afterward sold to a customer including that lease. The buyer of a pre-rented property is guaranteed a settled ROI (Returns on Investments) from the first day, which is been composed as a rental income as the rent deed is transmitted to their name.
Benefits of Investing in Pre-leased Assets:
The biggest competitive advantage that investors get from pre-leased commercial assets is the rental yield, which is higher than that available through traditional investment options; the yield for centrally located commercial properties is approximately around 7%, while for the residential segment it is just around 2.5%.
Another advantage is that investors start getting returns on their investments immediately and don’t have to be on a lookout for tenants. The key variables make pre-rented properties a feasible and attractive option for Investors. It is evident, seeing the market trends that the demand for commercial space is going to develop further at a fast pace, giving stable standard returns and capital appreciation in the long run.
Pre-leased: Compelling Investment Asset Type
Almost zero waiting period for the ROI to start
A pre-leased investment offers quicker capital appreciation
It furnishes with unmovable rental income and great returns
A stable debt-like return period during the entire holding period
Profile of Investors:
Investment against pre-leased commercial properties has become the most favorable option for property investors, entrepreneurs, and corporate houses. Pre-leased properties got maximum benefits in locations like Gurugram, Noida, and peripheral area of Delhi. Most investors look at a deal in the ticket size of Rs 1 to 50 crore and at Golden I the investment starts at 30lacs for pre leased retail shops
Future Scope:
Pre-leased commercial properties have become lucrative for investors. Factors like regulation on REIT, entry of several foreign investors, and strict disclosure norms under RERA are some of the indicators.
Pre-leased properties got maximum benefits in locations like Gurugram, Noida, and peripheral area of Delhi. In these markets the capital value is higher as compared to other micro-markets, opportunities of buying a rented office/retail space give a great scope for.
In terms of tenant profile, these markets see a diversified tenant mix from sectors IT/ITES, BFSI, Pharma, Manufacturing, E-Commerce, etc, this provides the owner portfolio balance and diversity. Also with positive macroeconomic factors along with positive regulatory initiatives, the demand from various sectors for the additional pre-rented property is bound to increase thereby having a positive impact in pre-leased CRE valuations.
