Residential vs commercial properties: Where to invest in 2022?
From the investment point of view, people always ponder where to invest-residential or commercial
Despite a roller coaster ride in 2021, the real estate sector of India is on the path to a solid recovery. Both residential and commercial real estate sectors are optimistic about sustainable growth in the near future. From the investment point of view, people always ponder where to invest-residential or commercial.
According to Nakul Mathur, MD, Avanta India in 2022, the commercial real estate sector is looking at a substantial demand as the commercial expansions, which were halted for the last two years, are bound to materialize in 2022.
“In general, the rental Return on investment (ROI) potential of commercial investment remains far better and more sustainable than residential space. Long term leases and contracts ensure a regular flow of income for the realty investors. In 2022, commercial real estate investment will be concentrated in offices, co-working spaces, and affordable shops. A growing trend in commercial real estate is fractional ownership. In this concept, instead of owning an entire property, the investor invests in a part of the property and enjoys handsome returns. This trend of fractional ownership will remain buoyant in 2022,” said Nakul Mathur.
Siddharth Maurya, Resource Specialist, Real-Estate and Fund Management said that it totally depends on the investment horizon of the investor
“As a thumb rule, If the investment horizon of the investor is large and he/she is looking at a long to very long term investment horizon, commercial real estate is the option to choose. However, factors such as location, availability of physical and social infrastructure and connectivity must be kept in mind while investing in a commercial asset,” said Siddharth Maurya.
"There is no doubt that the residential real estate investment generally comes with a lower price tag and a lot of people think of investing in flats, apartments and residential properties for a sustained rental income. The residential real estate investment in 2022 will be coterminous with the recovery cycle and as offices/commercial establishments have started calling the workforce back to work, there will be a simultaneous recovery in the rental market," said Dr Atul Goel, MD, Goel Ganga Group & President (Elect.), NAREDCO Pune.
According to recent industry reports, the office space absorptions between July-Sept quarter 2021 remained at 12 million sqft, a 168 pe3rcent rise from the previous year. Major markets such as Noida, Greater Noida, Delhi, Mumbai, Hyderabad and Chennai continue to attract commercial investors as they are seeing a bright prospect in their rental income yielding potential.
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First Published:30 Jan 2022, 08:00 AM IST
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