For people who want to invest in a second property in the city only for the sake of investments or rental returns, there is now another choice — commercial property.
Instead of purchasing an apartment that yields low rentals, investing in a commercial property, according to real estate players, ensures much higher returns. Recently, Puravankara launched in Chennai, a commercial investment opportunity for its Purva Primus, a high-rise office space tower on Rajiv Gandhi Salai.
Puravankara representatives said following the success of commercial investments in their projects in Bengaluru and Hyderabad, they had now opened up the concept in Chennai. Elaborating, Anand Narayanan K.B., president, sales and marketing and customer relationship management, said investors could buy about 350 square feet of space for Rs. 28 lakh.
With the current rental rate varying between Rs. 24 and Rs. 36 per sq.ft per month, investors can hope for returns anywhere up to 7 per cent per annum. Investors will lease the property back to Puravankara, who in turn will rent out, Mr. Narayanan said. According to the company representatives, interest from potential buyers looking to buy commercial property in Primus was overwhelming.
‘Not a new concept’
According to sources in the industry, this concept was not entirely new in Chennai.
However, so long it was limited to closed user groups with a group of developers coming together to buy entire floor spaces and sharing the rental income according to their initial investment.
The new offer made it possible for even individuals to invest in commercial property.
Sanjay Chugh, founder, Skylines Property Consultants, said purchase of commercial property would be ideal for people looking to expand their portfolio and also for those who want higher rental returns.
“Residential rental gives not more than 4 per cent annual return on total investments, while it is between 7 and 10 per cent for Grade A property in prime locations and coming along with excellent amenities,” he explained.
Asked how they viewed the Chennai market, where there are large stocks of vacant office space, Mr. Narayanan said there was a revival in sales of commercial property nation-wide and in Chennai too, the supply was bound to pick up.
