What is a Commercial Property?

As the name suggests, commercial real estate, or CRE, is a property that is exclusively used for business purposes. It can serve as a workspace, a shop, or something else that falls under the category of a business operation. Commercial spaces have a higher growth potential when compared to residential ones. Due to its better rental opportunities, commercial property can also serve as a mode of passive income. In short, the advantages of investing in commercial property are endless if you make the right choice.

Types

There are several different types of commercial property, depending on the purpose it has been built for. Each one of these commercial investments has its own advantages. Here are some of the most common ones:

• Office Spaces

With a greater tenant capacity, office spaces are undoubtedly the most popular form of commercial investment. Generally, these types of commercial spaces are further divided into two different types: urban and suburban. Urban office spaces are the ones found in Tier-1 cities, and these buildings are known for top-notch infrastructure and amenities. Suburban office spaces, on the other hand, are the ones in Tier 2 and Tier 3 cities. These buildings are usually smaller in size and can be multi-tenanted or single-tenanted. East tenant availability is one of the biggest advantages of investing in an office space.

• Industrial Spaces

An industrial space is one that has been designed to accommodate industrial operations. Generally, such commercial properties are located in the outer parts of the city to offer easy transportation. There are several different types of these properties, depending on the type of industrial purpose they are being used for.

1. Heavy manufacturing industrial spaces
2. Light assembly industrial spaces
3. Bulk warehouses
• Multifamily Rental Buildings

Due to the scarcity of land in urban areas and the skyrocketing prices of residential spaces, the concept of multi-family rental buildings is becoming hugely popular. In India, if a building includes five or more residential units owned by a single entity, it falls under the category of commercial real estate. This kind of residential space can include multiple apartments in a high-rise format, individual houses, independent-floor apartments, etc.

• Retail Spaces

A retail space is something that is used for specific commercial purposes, such as marketing and selling consumer goods and services. This category includes shopping centres, grocery stores, etc. A retail space can be either single-tenant or multi-tenant, depending on its size.

Benefits

Here are a few key advantages of investing in commercial property:

Higher Income Potential

Commercial real estate properties are always a better choice as compared to residential ones when it comes to their earning potential. It is easier to find a long-term and better-paying tenant for commercial properties. This is the reason why these properties allow investors to make decent profit margins. However, the rental income can vary from one property to another, depending on factors like locality, the current rental rate, etc.

Professional Relationships

People who purchase commercial property as an investment have a better chance of building professional relationships. The simple reason behind that is that commercial spaces are often rented out to businesses. The owners also operate their properties as businesses, which leads to a strong and long-lasting business-to-business relationship between the landlord and tenant.

Public Eye on the Property

Usually, commercial spaces are located in prominent localities of the city with huge foot traffic. This also ensures that the property always remains in the public eye. As a result, the owner never has to face any challenges when it comes to either selling the property or finding a tenant.

More Objective Price Evaluations

There is no denying the fact that price evaluation is a lot easier when it comes to commercial properties as compared to residential ones. The price can be decided by taking several factors into consideration, such as the annual income generated by the property. On the other hand, residential properties have no such determinants that can help with price evaluation.

Are you also looking for a good real estate property in Chennai that you can invest in? If yes, then there is no need to make Google searches like ‘land for sale in Kundrathur’, ‘land for sale in Manimangalam’ or something similar. With multiple projects in different parts of the city, Ashok Nandavanam offers a wide range of options for residential and commercial property. All you need to do is explore all of them and choose the one that meets your specific requirements.

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