Real Estate Pune
Single-Owned Commercial Properties in High Demand
By GeoSquare News Desk · Published 2024-06-17
The Indian commercial real estate market is witnessing a significant shift towards single-owned and managed properties. Investors are increasingly preferring these properties over strata-owned ones due to their ability to offer higher returns, operational efficiency, and greater attractiveness. According to experts, the rental yields for commercial assets across key property markets have been a major indicator of this trend. Single-owned commercial properties in pockets of key regions such as Mumbai, Bengaluru, Pune, Gurugram, and Chennai have demonstrated rental yield advantages of up to 32%. For instance, in Pune's South West region, single-owned properties showed an 18% higher rental yield compared to strata properties, while in Chennai's Southern Suburbs II, the difference was 32%.
Grade A commercial assets, managed through proactive asset management, attract top tenants. These assets offer reliability in services, utilities, and overall experience, which is essential for business operations and talent retention efforts. Tenants are willing to pay a premium for quality office assets, which is only achievable through single-owned asset managers.
One of the critical advantages of single-owned properties is operational efficiency. Single ownership allows for centralized management, which facilitates quicker decision-making and more effective property maintenance. Additionally, single-owned buildings are relatively younger in age, with an average age difference of 20% compared to strata-owned buildings. This difference gets even bigger in micro-markets where the delta in rentals is even higher.
In contrast, strata properties often face management challenges due to multiple owners, leading to delays in maintenance and decision-making processes. As a result, investors are increasingly preferring single-owned properties for their ability to offer higher returns, operational efficiency, and greater attractiveness.
K Raheja Corp, a leading commercial real estate developer, has been at the forefront of this trend. Vinod Rohira, MD & CEO, commercial real estate, K Raheja Corp, believes that single-owned assets attract top-tier occupiers who prioritize reliability in services, utilities, and overall experience.
CRE Matrix, a leading real estate research firm, has also observed this trend. Abhishek Kiran Gupta, CEO and cofounder, CRE Matrix, notes that single-owned buildings are better perceived due to the developer's focus on building and maintaining them to last longer for their own perpetual revenue stream.
In conclusion, single-owned commercial properties are in high demand due to their ability to offer higher returns, operational efficiency, and greater attractiveness. As the Indian commercial real estate market continues to evolve, it is likely that this trend will continue to gain momentum.