Why Prime Location Matters in Commercial Property Investment

The location of a property undoubtedly plays the most important role while making an investment in the real estate sector. It is not a concealed fact that making an investment in a commercial property situated in a prime location can prove to be the most beneficial and prudent decision in the long run.

These prime locations are more profitable. People are willing to pay a higher price for getting a commercial property situated in a high-traction location. According to recent stats, the real estate sector in India is on a growth path, and more people are willing to invest in commercial properties.

Advantages of commercial properties in a prime location

For all those investors who are willing to invest in commercial property but do not hold a clear notion regarding the importance of commercial property investment in the prime location, mentioned below are some of the advantages of investing in a commercial property located in a prime location.

1. Higher returns

If a person invests in a commercial property situated in a prime location for the purpose of renting it out, then they can easily get a higher return on their investments. There are numerous business owners out there who are looking for a commercial property located in the center of the city that can be easily accessible to all their employees and customers.

2. Easy and instant loan approval

Purchasing and investing in a commercial property in a prime location can also be a great option in the situation when you require instant loan approval from a leading bank or any financial institution. Commercial properties situated in a prime location hold a higher return on investment and fewer possibilities of a capital loss; the banks count it as a more credible investment, increasing the possibility of easy and instant loan approvals on those properties.

3. Easy access to the property

There are many who leave an organization due to daily commute issues. If you choose to invest in commercial properties in a prime location, then you need not fret about this problem. These properties can be accessed easily with multiple transportation lines. This can increase the number of people who wish to work for your business as well as the foot traffic in your establishment.

How to identify whether the location is prime or not?

Now that you have understood the importance of commercial property investment in a prime location, another question that might arise in your mind is how a person can identify whether the location of a commercial property is prime or not. Mentioned below are a few of the points that will assist you in determining the same.

• Ease of access: The primary element that makes any location prime is the ease of access. Can your employees or customers find the property without any hassle? Can they safely, quickly, and conveniently travel to your property?

• Proximity to hubs: A prime location is always close to all the commercial hubs and prominent places in the city like restaurants, shopping complexes, hospitals, etc. This ensures better convenience for people visiting your property.

Making an investment in the commercial property situated in a prime location has increased rapidly over the last ten years. Bear in mind all the above-stated points when choosing commercial property in a prime location and relish the maximum advantages of owning a property.

When searching for prime commercial real estate, it is essential to understand what defines a “prime location.” A prime location typically refers to an area that offers high visibility, accessibility, and the potential for business success. These locations tend to attract a lot of foot traffic, have superior infrastructure, and offer conveniences that draw in both businesses and customers.

Key Factors to Identify Prime Locations:

1. Accessibility and Foot Traffic:
   Prime locations should be easy to access for both customers and employees. Locations close to major roads, highways, and public transportation hubs generally see more visitors, which directly benefits retail businesses. Additionally, areas with high foot traffic offer retail businesses the opportunity to attract customers naturally, which leads to higher sales and customer engagement.
2. Proximity to Key Business Districts:
   Being close to business hubs, government offices, or corporate centers is a key indicator of a prime location. For instance, office spaces in central business districts (CBDs) are often highly sought after, as they offer convenience for employees and enhance the prestige of businesses. Proximity to other businesses increases opportunities for networking, collaborations, and visibility.
3. Proximity to Tech Parks and Commercial Hubs:
   Areas near tech parks, industrial zones, and shopping districts tend to experience higher growth potential, especially in rapidly developing cities. In tech hubs, for example, businesses are often in need of office space for their workforce, which increases demand for commercial real estate. Similarly, shopping districts attract a constant stream of potential customers, making them prime locations for retail investments.
4. Public Services and Amenities:
   Access to essential services such as hospitals, schools, and shopping centers can also enhance the desirability of a location. In real estate, prime locations often have nearby amenities that make life easier for both employees and customers, adding value to the property.

In India, prime real estate locations typically refer to metro cities (Tier 1 cities), such as Delhi, Mumbai, Bengaluru, and Chennai. These cities have established themselves as key commercial hubs, with high demand for both office and retail spaces. However, in recent years, Tier 2 cities like Noida, Pune, Chandigarh, and Ahmedabad have emerged as promising investment destinations. These cities are experiencing rapid growth in infrastructure, commercial activity, and residential development, which is increasing demand for real estate. Additionally, Tier-2 cities tend to offer comparatively lower property prices than Tier-1 cities, making them an attractive option for investors looking for high returns at more affordable prices.

Risks of Not Investing in Prime Locations:

While non-prime locations may offer lower upfront costs, they come with several risks that could affect long-term returns. Understanding these risks is crucial for investors.

Risk of Low Demand:

Properties in less accessible or non-prime locations often face lower demand. This can result in longer vacancy periods and difficulty in attracting quality tenants, particularly for office spaces. Retail spaces in less visible areas may also struggle to attract customers, which can directly impact sales and profitability. Additionally, non-prime locations may not appreciate as quickly as prime areas, limiting the potential for capital gains.

For example, a retail shop in a high-traffic area will likely attract more footfall, leading to higher sales, while a retail store in an obscure part of the city may struggle to reach the same volume of customers, impacting the growth and profitability of the business. Similarly, office spaces in peripheral areas may not have the same appeal as those located in central business districts, making it harder to secure long-term tenants.

Declining Market Conditions:

During times of economic downturn or market instability, prime locations tend to be more resilient than non-prime areas. In difficult times, demand for properties in central locations may remain stable, as businesses and consumers still value the convenience, accessibility, and visibility that these locations offer. Conversely, properties in peripheral or less sought-after locations can face a sharper decline in value during downturns, as demand from both commercial tenants and consumers diminishes.

For example, the office real estate market in central business districts may continue to perform well, even in a recession, because these locations are essential for high-profile companies and critical infrastructure. However, in outlying areas, businesses may delay expansion or seek more affordable alternatives, which can lead to a decrease in rental income or even vacancies.

Omaxe Chowk is a great choice if you are looking for a commercial property in a prime location in Delhi, NCR. Still, under construction, this property is expected to be 22-feet high, situated adjacent to Chandni Chowk metro station. Omaxe Group has several other (similar) commercial projects under its belt.