Commercial Real Estate Tips – Q&A With Anuj Puri

30. May, 2012 by Administration 7 Comments

Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India

What are the best options to look at in Gurgaon for getting rental returns from buying commercial pre-leased property? My budget is between 1-2 crore, +/- 15%. What are the issues one should be looking at, the options one has and returns one can expect?

You should look at MG Road or Golf Course Road. Both have predominantly commercial stock and vacancies are in single digits. A budget of Rs. 2 crore should fetch you a 1200-1800 square foot pre-leased options property. Annual returns would range from 8-9%.

I want to invest Rs. 40-50 lakh in retail space in NCR for 24% annual returns. Please outline my options

Considering your modest budget, you would have to look at malls in the lower-middle income clusters of Ghaziabad or Faridabad. Retail space purchase rates in better locations are all more than Rs. 10,000 a square foot. In any case, returns of 24% is just not possible – the maximum you could expect would be 10-12% per annum.

I want to invest in a commercial tower in Noida’s Sector 75. The builder has taken a booking amount but work is not happening from the last few months. Please suggest what is status of projects there.

You have not mentioned the project itself. However, since there is only one which is coming up in Sector 75, I can tell you that the project is still to commence. If you can get your booking amount back, I would advise you to look at other options in Noida – the projects by Wave Infratech, 3C and SuperTech are in better locations and have better investment potential.

Let me know what are the prospects for commercial space booked at Vatika India Next City Centre at NH-8/Sect-83. I am assured a return of 11%. Can you please tell me if this investment is worthwhile after 2 years, and when I will get possession? How much will be my return that time if I have paid Rs. 7800/- sqft?

This commercial development is part of a larger integrated township, which provides a high degree of assurance. This project is going to attract other commercial projects into the vicinity, as well. Moreover, Vatika enjoys a good reputation in terms of delivery and quality. Over the next two years, you should be able to see a healthy growth in your investment.

What will fetch me good returns from investment perspective – investing in mall space in Gurgaon or commercial office space in Noida?

Considering that you have not mentioned a budget but assuming it to be in the range of Rs. 2 crore, I would advise you to invest in an existing mall in Gurgaon – preferably on MG Road. Most of the commercial projects in Noida are in the initial stages of construction and possession, and the options over the mid-term are not too many. A preleased mall space in Guragon is definitely the best way to go.

I have an office space which is semi furnished, I want to lease it out either to a bank for ATM or to some company for office purposes. How to decide the rent of the location? My area is Sewak Park Extension, Rama Park Road, near Dwarka Modh Metro Station. For leasing to a bank, the property papers are on Sale Agreement, POA. Can a bank lease be done on the property holding based on POA?

You can do a comparative analysis by looking for other leased commercial properties in this area, and thereby get an indication of what your property would fetch. While doing this, you need to factor in the age of property, its exact location and the quality of construction. Depending on these variables, you will need to add or subtract from your asking rental and position your property accordingly. A POA allows you to lease out space, but banks are very conservative in their dealings. They will want to ensure that you are owner and may wish to deal with you directly. Also, a POA should be substantiated by an assurance from the original owners.

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