Single-Owned Commercial Properties in High Demand
Investors in India's commercial real estate market prefer single-owned properties for higher returns and operational efficiency
Commercial Real EstateSingle Owned PropertiesStrata Owned PropertiesOperational EfficiencyRental YieldsReal Estate PuneJun 16, 2024
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.
Frequently Asked Questions
What is driving the demand for single-owned commercial properties in India?
Higher returns, operational efficiency, and greater attractiveness are driving the demand for single-owned commercial properties in India.
What is the rental yield advantage of single-owned properties over strata-owned properties?
Single-owned properties have demonstrated rental yield advantages of up to 32% over strata-owned properties in key regions such as Mumbai, Bengaluru, Pune, Gurugram, and Chennai.
What is one of the critical advantages of single-owned properties?
Operational efficiency is one of the critical advantages of single-owned properties, which facilitates quicker decision-making and more effective property maintenance.
How old are single-owned buildings compared to strata-owned buildings?
Single-owned buildings are relatively younger in age, with an average age difference of 20% compared to strata-owned buildings.
What are the challenges faced by strata properties?
Strata properties often face management challenges due to multiple owners, leading to delays in maintenance and decision-making processes.
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