The best of times for commercial property investment, says JLL report

In India, real estate has traditionally been considered a favourable investment option. However, over the last few years, the realty market‘s momentum has even reversed in some parts of the country. Poor economic growth coupled with high property prices have made people more skeptical. And while, piling inventory and escalating prices led to decrease in demand, there looms several factors that currently make commercial real estate investment a safer bet: Weakening Residential Rationale Escalating residential property prices, low appreciation levels and increasing risk attached to investing in residential properties have all contributed towards a weakened confidence in this asset class, which was otherwise, the most preferred one for investors and end-users. Office Spaces Firm Up Given the oversupply in commercial real estate, prices are currently relatively low as compared to prices of residential real estate. Also, this segment holds scope for both capital appreciation and regular income through monthly rentals. REITs – A Game-Changer REITs are expected to be opened up shortly by the government. Not surprisingly, this model has found favour across the board and several owners of income-generating properties are now considering setting up REITs. There are other factors including: • The Impact of ‘Achhe Din’ • The Start-Up Boom • The Price is Right • Better Returns In Short: Today, investing in commercial properties has emerged as the more prudent route, especially for those who have enough equity for the down payment. The positive monthly returns promise a regular cash flow, so the investor is not dependent solely on appreciation to generate a profit. Anuj Puri, Chairman & Country Head, JLL India

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