The Perks Of Investing In A Commercial Property In Mumbai

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    May 28, 2014
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The Perks Of Investing In A Commercial Property In Mumbai Photo by Umov  Mehta

Indians invest more on gold and land. The reason behind this is the high return on investment and the demand for the asset that keeps on increasing with time. Though many believe that investing in residential area is more profitable than purchasing a commercial property in Mumbai, the reality is far from the truth. Being  the financial capital of India, the demand for a metropolitan city like Mumbai is always great compared to other cities. Though the prices of  commercial properties are comparatively high than apartments, they serve as a good platform for investment for their higher returns. 

Before investing in a commercial property in Mumbai, the first thing that you need to decide is the type of property. Commercial assets are broadly divided into three divisions – office spaces, warehouses and retail outlets. Analyzing the present scenario, it is safe to invest in office spaces, as the demand is expected to increase.  A recent research report submitted by a real estate advisory states that in the next 5 years 200 million sq ft of office space would be added to meet the demands of global expansion of companies. This means nearly a 50% increase in the area reserved for offices. As it is easy to maintain, the quality of tenants is much better and there is less damage on property, investing in office space is more flexible and profitable. Making investments on smaller standalone offices and  buildings that are specifically created for IT sector are lucrative as they are always in demand. 

Buying shops and retail outlets in prime locations is another way of getting high return on investments. Assets in busy streets and affluent areas are always on demand. Though shops are rented or leased for a higher amount than office spaces, the tenants that occupy the retail outlet can be unreliable compared to those who use it for office purposes. Tenants who occupy retail outlets may vacate the outlet at any time, without giving a valid reason or notice period. Moreover the increasing rate of malls has overshadowed the demand for independent properties for sale. This means the demand of assets located in high-street area is bound to fade over time. Hence, if you plan to go for long-term investments, then choose an area that is bound to be in demand in future too. Choosing a shop in an area that guarantees foot-falls will lead to a higher return on investments.

Like office spaces, warehouses are good for long-term investments. As many manufacturing units are located in distant locations, warehouses form an essential point of contact for brands to dispatch their goods to retail outlets. Land that is located close to the highway are more suitable for warehousing. While the investments are small, the rentals one get through warehousing is extremely profitable. Generally, an India property that is located on the outskirts of a city will be of more demand.  However, finding occupants and handling the day-to-day operations can be a bit difficult, as there are few pre-leased options. Making good contacts will serve the purpose.


Umov Mehta is a real-estate expert who researches on property rates in Mumbai and helps people to make smart long-term investment deals.

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