Investment upsurge in NCR Commercial segment

Authored by Sagar Saxena, Project Head, Spectrum Metro

The commercial segment has been the need for economic growth and development, and will remain so in coming years as well. The time of lockdown witnessed this sector got hit badly as no commercial activity was taking place. However, this sector, including retail, is recovering faster as people get back to work to keep the wheel of fortune rolling. The sale of commercial properties during the lockdown was an indication that investors and buyers realize the crucial part this sector plays in the well-being of people and the country.

At present, the commercial segment is staring at the increased investment by the NRIs in the present situation arising out of COVID 19. The investment opportunities for the NRIs are now much more flexible because of the depreciation of the rupee. 

The investors with a knack to invest in real estate diverted their attention towards commercial real estate because it gives them better yield and appreciation; this is why commercial realty attracted the maximum private equity investments in the previous year, totalling nearly USD 3 billion in the first three quarters.  Commercial realty includes industrial, retail, and frontier segments such as co-living, will continue to do well because of the good returns in the short and long-term.

A relatively new concept in the commercial segment, which foresees a bright future, is High Street. When everyone is inclined towards the mall concept, the high street brings with itself the old-world charm wrapped in novelty for people's convenience. The intention is to get the concept that the people already were aware of and grew up seeing. Both high street retail and shopping malls have their utilities and set of dedicated patrons. Elevating urbanization has led to the growth of high street retail. With constraining spaces, high streets are emerging as the places where people meet, greet, and have fun. Looking at the acceptability and popularity of the concept, investors too are showing interest towards it, resulting from foreign brands' interest in this concept. High streets are considered better than malls as they yield a better rental income and returns. Customers prefer the high street as they get a better brand and in-store experience. The demand is high in Tier 1 and 2 cities. In fact, Noida is becoming the hub of high streets because of better connectivity through metro rail, an excellent road network, and a vibrant residential market.

The segment has been performing exceedingly well riding on the innovative investment options it has come out with. One such option is the investment in pre-leased properties, which is turning out to be a popular form in Noida as the buyer is assured of a settled ROI. The property owners have the advantage of earning a pre-settled rental income and the capital gain on the property that is purchased. Today, both foreign and national investors, UHNIs and HNIs, actively invest in this asset. The most important aspect of investing in commercial property is the location assessment. The proximity to the metro and residential projects promises immense success.