The key to a secure future is to diversify your investment so that you can create multiple sources of income. This hold true in times like today when uncertainty seems to surround every sphere of life and business.
Investment in real estate has off late become extremely sough-after considering the fickle nature of other investment instruments like stock market, gold, fixed deposits etc. The lockdown owing to the pandemic has shown us why homes are important and similarly investment in sound and risk-free commercial/retail assets has shown how good returns can help in securing the future by not just opening another source of income but also exploring the idea of doing one’s own business.
Investing in retail comes in not just about attractive returns. It’s more than that for sustaining your investment and preserving your capital. The lifecycle of malls is a unique phenomenon in the commercial real estate segment. Birth, growth, maturity and decline – malls are as prone to life forces as the rest of us. Every mall goes through its years of glory, after which it plateaus and then declines in both revenue and footfalls, as newer malls appear in the vicinity. In some cases, this cycle gets over in just a couple of years, causing investors to incur heavy losses on rentals as well as capital. Neighborhoods of Noida and Gurgaon have been witnessing this phenomenon repeatedly in office spaces as well.
Oversupply in NCR is a result of the low real estate supply in the National Capital Delhi. However, with its gradual unlocking, more commercial projects are coming up in Delhi in an organized setup. As a result, the trend of commercial redevelopment is fast catching up in Delhi especially in places like Chandni Chowk, where an organised commercial space comprising retail shops is being created amidst a thriving marketplace. Both shoppers and businesses increasingly prefer cleaner and more hygienic retail spaces while maintaining the essence and aesthetics of the place. In short, an old-world charm in a modern set up. Omaxe Chowk in Chandni Chowk, one such example that is being developed in Public-Private Partnership with North DMC, is a multi-level parking cum commercial project in Asia’s largest wholesale and retail hub Chandni Chowk.
Here are the five things you must keep in mind before investing in commercial space:
Any location that boasts of a captive footfall or doesn’t threaten the commercial space where you have invested in owing to the presence of another commercial space in the vicinity is the best bet for investment.
Chandni Chowk is visited by almost 5 – 6 lakh people daily and most for serious shopping. So, businesses already have a faithful footfall. With the said redevelopment, this number will go up substantially. A large number of tourists also visit Chandni Chowk in large numbers and now aided by the Delhi Metro, its connectivity has been further enhanced. As more and more unorganized markets are getting converted, shoppers and business have started moving into these organized, modern shopping destinations
2. No future development:
The presence of a bigger mall in present times or in the future adjacent to your investment is bound to jeopardise your investment. One must ensure this aspect while investing in retail shops.
There has been no commercial development in Chandni Chowk for centuries and the likelihood of any commercial development happening in the near future is also bleak. This means, there will be no upcoming organized commercial space or commercial property in Chandni Chowk or Omaxe Chowk, and hence no possibility of cannibalization of either business or footfall.
3. Maximum Capital Appreciation
Based on the rental and 6 – 8% yield in commercial properties, the current prices of property in NCR are overpriced and will continue to do so for the next 2-3 years. This means, not only will there be an issue with re-saleability of your shop/office space, but also with liquidity due to the lack of buyers. However, based on both present and future rental and yield analysis, the price of property will show greater appreciation and rentals, capital preservation and liquidity, in Omaxe Chowk.
4. Great Monthly Returns
Many investors have often been lured with the promise of unrealistic returns. However, after possession, these promises of rentals fizzle out, as office spaces/malls are unable to attract businesses due to the presence of other newer malls and office spaces in the vicinity. However, Chandni Chowk is a paradise. The lack of organized space may have prevented businesses and brands from entering this market till date, but with Omaxe Chowk, not only is a next-gen market being created amidst massive demand, but it has also given an opportunity to businesses to cater to a captive visitor base that have been faithfully visiting Chandni Chowk for years for wedding & jewellery shopping, food and tourism. So the rentals on this property are assured and growth is also guaranteed, taking into consideration the above factors. Even measured with inflation, the return promises to be healthy.
5. Product offering Malls
In India are now popular weekend destinations. However, with changing times, a visit to Mall has become more than just for shopping. People expect the mall to provide them and hold on to their attention span for a longer period. That’s where edutainment in a mall comes into the picture. Omaxe Chowk, due to its superb architecture, design and planning provide enough to hold the attention and time span of visitors due to its tourism spots that tell the history and culture, product diversification be it in jewellery or apparels or even food encompassing delicacies from across India.