Harry Singh, Head Business Development, Do Rent a consulting firm focused on rentals, says that the intent of every investment is to earn safe revenue returns, commensurate to or higher than the available channels. In the case of real estate investment, there is obvious advantage of physical possession of a tangible asset, which gains capital appreciation, fixed monthly returns besides higher liquidity with minimal depreciation against market value. "Particularly in case of commercial retail space, investment is higher but the rental gains are the highest compared to other investment channels. It is however to be noted that returns vary between all the segments, commensurate to the entry timings and the risks factored in".
Adds Shubrahnshu Pani of Tramell Crow Meghraj "Comparing investment in retail real estate with residential and office real estate, I would say that appreciation is higher while rentals yield and risk factor are lowest in residential property. Commercial real estate is less volatile in comparison. In retail real estate, the returns are moderate in terms of appreciation while the rental yield is highest, subject to the demand-supply scenario. Finally it depends on investor’s ability to weather risk, investment power and temperament for his decision to invest". Sanjay Sachdeva says that in terms of comparative returns and security, investing in retail property is a lucrative proposition. In fixed deposits and mutual funds, the money value goes down due to inflation. Moreover the lock in period is higher. On the other hand in retail real estate lock in period is low and value and returns constantly go up.
Subhash Lakhotia, Tax and Investment Consultant, also endorses Sachdeva's viewpoint "While stock market is very volatile, there is more liquidity with investors in retail real estate. Along with high rental returns there is hidden capital appreciation. I would advise all investors to allocate 20percent of their investible funds for retail real estate". In fact Lakhotia's Investor Club is investing 100percent in retail real estate market. "On one hand our investment is secure as we are investing in legally authorized space in malls. On the other hand we are getting a ROI of 10-14 percent," he says.
Courtesy realty plus



