Commercial Real Estate> Residential Real Estate ??

Real estate is usually considered as tangible, safe, and risk-mitigated investment.The recent tailspin in the crypto and financial market has further reinforced the importance of real estate as a safe haven to park your capital.

Meanwhile, in terms of investment, it was housing that was preferred during earlier days.No one wanted the hassle of commercial property. Right now where residential properties give a 3-4% on rent, In contrast, offices in IT parks/ business zones give returns in the range of 6-8%. Commercial offices in many sought-after Commercial Business Districts can give a higher yield of 7-9%. Meanwhile, shops in malls & shopping complexes can give a yield of up to 9%. Other assets, such as warehouses can also give a competitive returns in the range of 5-6%. In the past 5-6 years, trends are shifting, with Indian investors now realizing the importance of commercial real estate as a sophisticated asset class to make elevated yields. There is growing interest in office stocks, retail units, shops, etc., to make recurrent rental income along with attractive capital appreciation. Lease terms are also for larger time periods in commercial assets, which makes them more stable in the longer run.

The utilitarian value of a house as an asset is unquestionable, as everyone has to own a home. Nevertheless, when it comes to making smart returns, commercial is a much more attractive option to deal with. It helps you to build a steady cash flow with attractive rental returns. Commercial real estate can also be instrumental in hedging against inflation, as property prices and rental rates are mostly in sync with the general rise in consumer prices.

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