‘COMMERCIAL FOR ALL’: A NEW VOICE IN INDIAN REALTY
Being a developing nation, India is one of the most prolific and still pretty much untapped real estate markets of the world that has long been known for attracting domestic and foreign investors. This foreign intervention in Indian realty market and rising domestic presence of developers has somewhere given a transformation boost to country’s real estate sector over the last couple of decades. Historically, real estate has been broadly classified into two main categories; residential and commercial. Both of these are interdependent as residential real estate can’t survive without a good commercial realty existence to meet daily needs of residents and on the other hand, commercial real estate will always need residents around it to meet the catchment demand of a region. The current Indian government has been extremely proactive with its approach towards providing houses to everyone; but will it actually suffice the entire purpose?? Thus, ‘Commercial For All’ is an equal need of the hour as ‘Housing For All’ so as to promote an overall growth of the economy and realty sector.
To provide an Economic boost:
Real estate sector has been one of the prime contributors to Indian Gross Domestic Product (GDP) and employment generation, due to which it been a key focus area of the government. Commercial real estate plays a vital role in making sure that the sector keeps this momentum going and enhances the economic scenario of a nation. “A commercial real estate is recognized as a more professional work of construction as it involves better and unique architectural designs, construction, planned location, connectivity, schemes, etc. A commercial property may be developed as small as 200 sq. ft. to as big as 2,00,000 sq. ft. or more. Therefore, a lot of planning, fund allocation & management, manpower, technology and execution are involved for the commercial real estate to perform. The end result thus becomes greater employment generation, more FDI in term of funds and technology, better returns and overall growth of the realty sector”, explains Mr. Kushagr Ansal, Director, Ansal Housing. Adding to the fact, Mr. Ashok Gupta, CMD, Ajnara India Ltd. avers “Residential real estate can greatly satisfy domestic demand but foreign demand to a certain extent only. Whereas, commercial real estate provides this benefit to domestic as well as foreign investors; in fact foreign investors rely greatly upon a superior commercial setup in a country to enter and settle. Thus, the purpose of adding value with benefit to the sector and economy is better achieved with developing commercial projects in sync with residential projects”.
Must move parallel with ‘Housing For All’:
Addressing the shortage of housing needs is of extreme importance considering the value of a roof overhead along with the three primary needs of a human being. But providing a roof should not be the only goal as a habitat remains incomplete without proper infrastructure and availability of commercial units around the residencies. “There exists a direct relation of demand and supply between residential and commercial real estate. If there is huge residential settlement in a region, then supply for commercial spaces is in demand and vice-a-versa. Housing for all is crucial for fulfilling basic needs of the people, but what about offices, retail spaces, hospitality spaces, etc. Thus, Commercial real estate plays the part of completing the real estate outlook of a destination, which is imperative for the sector and economy to perform and grow”, elucidates Mr. Ankit Aggarwal, CMD, Devika Group. Also agrees Mr. Vivek Gupta, Director, Vardhman Estate & Developers (P) Ltd. as he says “The need for housing has been ever-growing in our country, looking at the rising population levels. Provision of homes is one aspect of fulfilling the necessity, but providing employment and a place to work will assist in fulfilling the three core needs; social need, esteem need and self-actualisation need. Providing commercial spaces will always be an integral part of developing a society and should be thus, kept in sync with the housing needs”.
Providing better returns:
Developing commercial properties requires a lot of fund allocation and heavy duty investment, in many cases even more than a residential property. Since the investment is greater, the return is tend to be higher. For instance, it is often seen that a 500 sq. ft. commercial property developed at a good location with quality construction and features will give a return more than a 2,500 sq. ft. of residential property. So, it is always beneficial for a developer to build and sell commercial properties with a well laid plan along with strong internal and external catchment around. Mr. Sushant Muttreja, CMD, Cosmic Group states “Today, developers have several ongoing commercial projects across the country. One reason is the increasing demand of office spaces, and other being better returns through lucrative deals that residential properties can’t always offer. Commercial units usually carry assured return schemes with them and this allows the buyer to start getting returns from the date of booking till possession. After that, the property can be put to lease or even sold, thereby carrying the process of earning returns. Therefore, it is an all win situation for the buyers”.
Long term vision:
Since the returns in commercial real estate are higher and the demand for them rising significantly over the past few years, commercial real estate is sure to take the Indian realty map to the next level. Putting light on the current trends of how commercial real estate is conducting in our country, Mr. Rupesh Gupta, Director, JM Housing explains “As far as commercial real estate in India is concerned, it is already witnessing a boom in the market due to a high demand of office, retail and hospitality spaces. This will continue to grow as the developers are planning and introducing newer and unique concepts with respect to enhancing the official lifestyle of a user such as providing homely facilities like spa, gyms, yoga centres, jogging tracks, café areas, restaurants, shopping complexes, etc. at a commercial property. Features like these are sure to keep the demand graph rising for commercial properties”.
As the demand for commercial properties increase, meeting the supply will become crucial. Our Hon’ble Prime Minister Mr. Narendra Modi has been keeping extremely busy by making foreign visits and attracting FDI. Over the last one year, more than 20 countries have been pursued and FDI has sharply risen by more than 50 percent. Now what about global giants planning to setup offices in India, and why only metro cities? Just like Housing For All, if commercial spaces are made available everywhere, individual regions will grow and will be able to satisfy regional demand as well. “There is no point in creating homes for everyone if people cannot afford to buy one. To make them buy, we need to provide employment with better scales and even better environment. Just like homes, commercial spaces need to be made available across the country, so as to allow overall growth of the realty sector of India and the economy as well. Housing For All is now in pipeline, but Commercial For All needs to thought off by the government”, concludes Mr. Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz.