How to Maximise ROI on Your Commercial Property Investment in Pune

If you are considering investing in commercial property in Pune, you are in the right place. Pune is a rapidly growing city with a strong economy, making it an attractive destination for commercial property investment. However, like any investment, there are risks involved, and you need to be strategic to maximize your return on investment (ROI).

In this blog, we will provide you with some tips on how to maximize your ROI on your commercial property investment in Pune.

1. Choose the right location

Location is a critical factor in determining the success of your commercial property investment. Pune has several emerging commercial hubs, such as Hinjewadi, Kharadi, Magarpatta, and Baner, which are attracting a lot of businesses. Choose a location that is easily accessible, has good infrastructure, and is close to transportation hubs, to attract high-quality tenants.

2. Research the market

Before investing in commercial property, research the market to understand the demand and supply dynamics, rental rates, and occupancy rates. This will give you an idea of the potential rental income and capital appreciation of your property.

3. Choose the right property type

There are several types of commercial properties, such as office spaces, retail spaces, industrial spaces, and warehouses. Choose a property type that aligns with your investment objectives and has a high demand in the market.

4. Negotiate the best deal

When investing in commercial property, negotiate the best deal possible. This includes the purchase price, lease terms, and maintenance costs. Engage a real estate lawyer to review the contracts and ensure that you are protected.

5. Maintain the property

Maintaining your commercial property is essential to attract high-quality tenants and maximize rental income. Regular maintenance and upgrades will keep your property in good condition and help retain tenants.

6. Stay updated on market trends

Keep yourself updated on market trends, such as changes in rental rates, occupancy rates, and government policies. This will help you make informed decisions and adjust your investment strategy accordingly.

7. Consider investing in a commercial property fund

If you do not have the capital to invest in a commercial property, consider investing in a commercial property fund or a real estate investment trust (REIT). These investment vehicles pool the funds of multiple investors to invest in a diversified portfolio of commercial properties.

Market Trends and Status in Commercial Property in Pune

According to a report by JLL, Pune witnessed a 17% year-on-year (YoY) growth in leasing activity, with IT-ITeS companies accounting for 52% of the total demand. The same report also projected that Pune is likely to witness steady growth in demand for commercial real estate over the next few years, owing to its well-established IT-ITeS industry and growing start-up ecosystem.

Another report by Knight Frank states that the office market in Pune has remained resilient amidst the COVID-19 pandemic, with leasing activity in Q2 2021 increasing by 71% YoY. The report also highlights that the demand for flexible office spaces in Pune has been on the rise, with many large corporates and SMEs opting for such spaces to accommodate their workforce.

Moreover, the Maharashtra Industrial Development Corporation (MIDC) has been developing various industrial parks and SEZs across Pune to promote investment in the region. The MIDC has also recently announced plans to develop an IT park and a furniture park in Chakan, which is likely to attract more businesses and drive demand for commercial real estate in the area.

Overall, these trends suggest that investing in commercial properties in Pune can offer promising ROI prospects, especially for those looking to invest in the IT-ITeS sector or in flexible office spaces. However, it is always advisable to conduct thorough research and analysis before making any investment decisions.

Do’s and Don’ts of commercial property investment in Pune

Do’s

Don’ts

1. Research thoroughly the location, market trends, and potential of the property before investing. 2. Consult with a trusted real estate advisor and seek their guidance throughout the investment process. 3. Check the legal documents and verify the property’s ownership and titles before making any payment. 4. Consider the infrastructure and connectivity of the property, as it can have a significant impact on its value and demand. 5. Analyse the potential return on investment and the rental yield of the property before making any investment decision. Consider the maintenance and operational costs of the property before investing.

1. Do not rush into an investment decision without proper research and analysis. 2. Do not rely solely on the advice of the seller or broker, and always verify the facts and figures independently. 3. Do not ignore the legal documentation and ownership details of the property. 4. Do not invest in a property without considering its location and connectivity. 5. Do not solely rely on the expected appreciation of the property and ignore the rental income potential. 6. Do not overlook the maintenance and operational costs associated with the property.

In conclusion, investing in commercial property in Pune can be a lucrative investment, but it requires a strategic approach. By choosing the right location, property type, negotiating the best deal, maintaining the property, and staying updated on market trends, you can maximize your ROI on your commercial property investment in Pune.

References:

1. “Report: Pune Emerges as a Major Market for Commercial Office Space,” The Economic Times, September 3, 2019.
2. “India Office MarketView Q4 2020,” Colliers International India, January 20, 2021.
3. “Pune Office Market,” JLL India, January 2021.