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- 31/10/2023
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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 centers, and residential, investing in properties in Mumbai can provide high returns, capital appreciation, and tax benefits.
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 major industries like banking, finance, IT, entertainment, and telecom. The city has a high demand for commercial space from domestic and international businesses. According to CBRE South Asia PVT Ltd report, Mumbai accounted for 35% of total office space absorption in India in Q2 2022.
- Rental Income: Commercial properties in Mumbai offer steady and stable rental income. 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. Upcoming commercial hubs in Mumbai are Bandra-Kurla Complex, Lower Parel, Andheri East, and Goregaon East.
- Tax Benefits: Investing in commercial properties in Mumbai provides 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 many prime locations that provide opportunities for investing in commercial properties. Some of them are:
Bandra-Kurla Complex (BKC): BKC is the most sought-after business district in Mumbai, with several high-rise buildings and luxury hotels. BKC hosts many prominent companies like 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 is connected to other cities 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 office spaces, retail outlets, hotels, and industrial units. Andheri East has easy access to other areas via metro, rail, and road networks. The average cost 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 centers, and residential complexes. Goregaon East is well-connected to other areas through metro, rail, and road networks. The average cost 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 commercial property's location is one of the most important factors to consider before buying it. The location should be convenient to reach and have good transport connectivity. The location should also strongly demand commercial space from potential tenants or buyers.
- Property Condition: The commercial property's condition is another 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 factor to consider before buying it. The rental income covers the expenses of the property loan repayments, maintenance charges, and taxes. The rental income should be consistent and predictable, with a low vacancy and high occupancy rate.
- Capital Appreciation: The capital appreciation of the commercial property is another factor to consider before buying it. The capital appreciation should be higher than the inflation and the loan interest rate. Capital appreciation should also depend on market trends and the area's future development.
- Tax and Legal Aspects: Commercial property tax and legal aspects are another factor to consider before buying it. The tax and legal aspects include the property tax, stamp duty, registration charges, GST, and other applicable taxes and fees. The tax and legal aspects include the title deed, ownership documents, zoning restrictions, and other legal issues that may affect the property.
Investing in Commercial Properties is an option for high returns, capital growth, and tax benefits. 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.