Investing In Commercial Properties: A Lucrative Opportunity in Mumbai

You might have searched ‘Property advisors near me’ while contemplating investing in real estate in India. If yes, you already know the importance of a property consultant to help you invest in a city that yields good returns.

Mumbai, the financial capital of India, is one of the most attractive destinations for commercial real estate investors. From office spaces and retail outlets to hotels, convention centres, and residential, investing in properties in Mumbai can provide high returns, capital appreciation, and tax benefits. So let’s cut the chase and explore how to utilise your money through the right property investments. 

Why Invest In Commercial Properties In Mumbai?

There are several reasons why investing in commercial properties in Mumbai is a smart choice for investors. Some of them are:

Commercial Hub: Mumbai is home to many leading industries, such as banking, finance, IT, entertainment, and telecom. The city has a high demand for commercial space from both domestic and international businesses.

According to a report by CBRE South Asia Pvt Ltd, Mumbai accounted for 35% of the total office space absorption in India in Q2 2022.

Rental Income: Commercial properties in Mumbai offer a steady and stable source of rental income for investors. The rental yields of commercial properties are higher than residential properties, ranging from 8% to 12%. Plus, the rental income increases over time due to inflation and appreciation of property value.

Capital Appreciation: Commercial properties in Mumbai have a high potential for capital appreciation due to the limited supply and high demand for commercial space. The city has witnessed significant growth in the development and absorption of commercial projects, especially in the central and western regions. Some of the upcoming commercial hubs in Mumbai are Bandra-Kurla Complex, Lower Parel, Andheri East, and Goregaon East.

Tax Benefits: Investing in commercial properties in Mumbai can also provide tax benefits for investors. The interest paid on loans taken for buying commercial property can be deducted from the taxable income. The depreciation of the property can also be claimed as an expense. Additionally, the income from commercial property is taxed at a lower rate than residential property.

Best Locations to Invest In Commercial Properties In Mumbai

Mumbai has several prime locations that offer lucrative opportunities for investing in commercial properties. Some of them are:

Bandra-Kurla Complex (BKC): BKC is one of the most sought-after business districts in Mumbai, with several high-rise buildings and luxury hotels. BKC hosts many prominent companies, such as Google, Amazon, Facebook, and Reliance Industries. BKC also has excellent connectivity to other parts of the city via metro, rail, and road networks. The average price of commercial property in BKC is Rs 35,000 per sq ft.

Lower Parel: Lower Parel is another emerging business district in Mumbai, with many skyscrapers and shopping malls. Lower Parel has transformed from a mill area to a modern commercial hub, attracting many media, IT, and entertainment companies. Lower Parel also has good connectivity to other areas via metro, monorail, and road networks. The average price of commercial property in Lower Parel is Rs 25,000 per sq. ft.

Andheri East: Andheri East is one of the most popular locations for investing in commercial properties in Mumbai, due to its proximity to the airport and railway station. Andheri East has a mix of office spaces, retail outlets, hotels, and industrial units. Andheri East also has easy access to other areas via metro, rail, and road networks. The average price of commercial property in Andheri East is Rs 15,000 per sq. ft.

Goregaon East: Goregaon East is another upcoming location for investing in commercial properties in Mumbai, due to its affordable prices and strategic location. Goregaon East has many IT parks, business centres, and residential complexes. Goregaon East also has good connectivity to other areas via metro, rail, and road networks. The average price of commercial property in Goregaon East is Rs 10,000 per sq. ft.

Things to Consider Before Buying Commercial Property In Mumbai

Before investing in commercial properties in Mumbai, there are several factors that one should consider carefully. Some of them are:

Location: The location of the commercial property is one of the most important factors to consider before buying it. The location should be easily accessible and have good transportation links. The location should also strongly demand commercial space from potential tenants or buyers.

Property Condition: The condition of the commercial property is another important factor to consider before buying it. The condition of the property should be good and well-maintained. Any repairs or renovations that may be needed should be factored into the cost of the property. The property should also comply with the building codes and regulations of the area.

Rental Income: The rental income of the commercial property is another important factor to consider before buying it. The rental income should be sufficient to cover the expenses of the property, such as loan repayments, maintenance charges, and taxes. The rental income should also be consistent and predictable, with a low vacancy rate and a high occupancy rate.

Capital Appreciation: The capital appreciation of the commercial property is another important factor to consider before buying it. The capital appreciation should be higher than the inflation rate and the interest rate of the loan. The capital appreciation should also be based on the market trends and the future prospects of the area.

Tax and Legal Aspects: Commercial property's tax and legal aspects are another important factor to consider before buying it. The tax and legal aspects include the property tax, stamp duty, registration charges, GST, and any other applicable taxes and fees. The tax and legal aspects also include the title deed, ownership documents, zoning restrictions, and any other legal issues that may affect the property.

Investing in Commercial Properties is a great option for high returns, capital growth, and tax benefits. But it also has many risks and challenges that need expert help.

Kunvarji Realty Advisors is a top real estate firm that can help you with all your real estate needs. We can find the best properties for you, advise you on legal, financial, and regulatory matters, and manage and maintain your properties.

Contact us today if you want to invest in Mumbai's commercial real estate. Kunvarji Realty Advisors is your reliable partner in real estate success.