How to Choose the Right Location for Your Commercial Property

The location where the commercial property is located is a landmark. People want to invest in commercial properties located in prime areas at a premium price to attain profitability since these landmarks offer the ultimate benefits for acquiring commercial property. You can make money by investing in commercial property for sale. The location of commercial property is considered the most important factor. The commercial property location impacts its worth, chances of success, and long-term profitability.

Table of Contents:

What is Commercial Property?

Real estate used for conducting business activities and has the potential to generate profit through either capital gain or rental income is known as commercial property. It is an immovable property, used for industry. Commercial property not only refers to a building that houses businesses but also refers to land used to generate profit or rental properties situated in large residential areas.

Financing, taxation and how laws are applied to it are all impacted when a property is classified as commercial property.

Commercial property not only includes industrial estates but also includes malls, grocery stores, manufacturing shops and many more. Investment done in commercial real estate is a safe investment.

Types of Commercial Property:

There are 6 types of commercial property:

1. Office:

There are two main types of office buildings:

Suburban
Urban

Suburban office buildings are often grouped in office parks and are typically smaller in size.

Skyscrapers and high-rise structures, some of which may be as large as several million square feet, are examples of urban office buildings that may be found throughout cities.

Office buildings can be:

Multi-tenanted (or)
Single-tenanted

They’re also ranked in three tiers: Class A, Class B, and Class C.

Class A: The most elegant buildings, with rent higher than typical for the neighbourhood, are vying for top office tenants. Modern systems, premium standard finishes, outstanding accessibility, and a distinct market presence are all features of the buildings.

Class B: Buildings with typical office space have high-quality construction but the location is not very desirable.

Class C: Buildings competing for tenants requiring functional space at rents below the average for the area. Medical office buildings are a speciality sub-sector in this space.

2. Retail:

Different types of retail properties can be found in urban and suburban locations. They are the commercial places that host the stores or restaurants that we often visit.

The retail industry is complex since several factors determine the sort of shopping centre, such as its size, idea, types and numbers of tenants, and trading area.

If you want to know the differences between office space and retail space, then read this blog.

3. Residential Properties Let Out for Commercial Purpose:

An apartment or residential building may occasionally be rented out for commercial purposes, as is the case with serviced apartments. Other instances are condominiums. The popularity of these properties has increased significantly during the globalisation era.

The majority of tenants in these buildings are multinational corporations (MNCs) and foreign nationals. A big, reputable organisation typically manages these properties, and in exchange for managing the show, the company may receive a commission from the owner. Want to know the process of buying residential properties.

4. Industrial Properties:

Larger and typically found outside of urban areas are industrial properties. They rarely have another use and might be very ancient or very modern. There may be several subcategories within this industry, such as factories, machinery assembly units, various kinds of warehouses, or even a research and development facility.

The owner of an industrial property typically occupies the space. Sometimes, though, they are rented out to tenants. It is occasionally possible to do business from an industrial site with permission.

5. Hospitality Properties:

There are lodging options such as motels, hotels, and resorts that are meant for short visits, typically by tourists. They may be independently owned and operated or they may be a part of a big chain, such as a network of hotels. This category also includes boutique hotels and resorts, which often include cuisine, communication, a concierge, and other amenities to make its guests feel comfortable.

6. Speciality Properties:

Some commercial properties, such as amusement parks, bowling alleys, skating rinks, and others, do not fit into any of the aforementioned categories. From a historical perspective, these are the most recent additions to the list of commercial properties.

Also Read: Leasing vs. Buying Commercial Property: which is a better option?

Importance of Location in Commercial Real Estate

What Makes Location So Important?

Accessibility and Visibility: Accessibility is one of the main factors which makes location important in commercial real estate. Factors like property’s distance to major highways, and public transport greatly affect its accessibility. Commercial properties with good visibility from the road tend to benefit more hence making visibility another important factor.
Competing properties/businesses: Checking other properties in nearby areas is crucial. A market with an excessive number of products might result in intense competition and therefore decreased revenues, even if some competition can be beneficial. On the other hand, if you establish your business in a place where there is very little competition then there are a high number of chances for you to have an advantage over them.

Things to Know Before Choosing the Location of a Commercial Property:

1. Understanding Your Business Needs:

Verifying that the facility can accommodate the demands of the business is also essential. Depending on the kind of business operating out of the location, this will vary. A kitchen is necessary if the business is a restaurant or coffee shop, as installing the necessary plumbing and electrical infrastructure might be expensive. Think about if there is sufficient electricity to suit the demands of this business as well. A company that uses heavy gear and consumes a lot of power must make sure that the facility can handle the necessary electrical output.

2. Demographics and Target Audience:

Data about the socioeconomic traits of the populace in a certain geographic area is referred to as demographics. It includes information about age, gender, place of residence, level of education, job, income, and homeownership, among other things. Analysing the local population while picking a location for your business can help you pinpoint a target market that will support the growth of a target audience for your business.

3. Accessibility and Transportation:

Accessibility should be your priority when selecting a location for your business. Consider every individual who will interact with your business, including suppliers, distributors, clients, consumers, and staff.

4. Competition Analysis:

A business location may be a double-edged sword in terms of competitiveness. If you choose to locate your business near your rivals, you run the risk of either gaining access to their excess customers or losing your customers. Therefore, choosing to put your company close to competitors needs cautious consideration.

5. Future Growth and Development:

It’s critical to consider your company’s future while selecting a development site. Make plans for the growth that you expect, whether it be in the form of more staff, a wider range of products, or new services.

Benefits of Buying Commercial Properties:

Benefit	Description
Cash Flow	The possibility of cash flow is one of the main advantages of investing in commercial real estate. Typically, firms that lease commercial premises do so with monthly rent payments, giving the property owner a consistent flow of revenue.
Appreciation	Commercial real estate may see an increase in value over time. The value of the property may rise as the neighborhood grows and it becomes more desired, giving the owner a return on their investment.
Diversification	One strategy to diversify your financial portfolio is to invest in commercial property. You can potentially boost your profits and lower your total risk by including commercial property in your portfolio.
Tax Benefits	Buying commercial real estate has several tax advantages. Tax liabilities for property owners can be decreased by deducting expenditures like depreciation, property taxes, and mortgage interest.

Top 5 Best Locations and Commercial Properties for Investing in Delhi,Ncr by Omaxe:

1. Omaxe Chowk (Chandni Chowk):

One of the most famous places with the most vibrant and oldest market of old Delhi is Chandni Chowk. This area is a mix of both commercial as well as residential properties.

Omaxe Chandni Chowk can be a good investing option for investors who want to invest in commercial properties. This place has its historical value, so the price of properties can be relatively high.

2. Omaxe World Street (Faridabad):

This city is situated in Delhi NCR’s southern sector, which has seen tremendous growth in recent years. Faridabad has set aside space for both industrial and residential property investors.

The city has excellent road and metro connectivity, as well as infrastructural development. In terms of affordability, Faridabad is the best place to invest in property as compared to other regions of Delhi NCR.

3. Omaxe Connaught Place: (Greater Noida):

Sector 75 Noida is home to Omaxe Connaught, a strategically significant area. This project seeks to restore Connaught Place in Delhi, which is a desirable area for investment due to its attractiveness.

You may expect high-street retail, diverse office space alternatives, and a range of entertainment possibilities from the Thai project.

4. Pearls Omaxe (Wazirpur):

There is nothing like Pearls Omaxe that you have ever seen. Its prime location on the Ring Road at Netaji Subhash Place would completely alter the perception of business space for the many upper-middle-class residents in the surrounding neighbourhoods.

5. India Trade Center (Greater Noida):

The Omaxe India Trade Centre is a Greater Noida initiative that establishes standards and sets trends. The India Trade Centre’s prime location and state-of-the-art facilities will make it a one-stop destination.

Conclusion:

There is much importance in the location of commercial property. You cannot overstate the impact of location on commercial property while investing in it. Knowing how location affects property prices and success is crucial for everyone involved in real estate, including tenants, company owners, and investors. You may optimise the return on your investment in commercial property by considering aspects like competitiveness, accessibility, and local economic conditions.

How to Choose the Right Location for Your Commercial Property: Strategic Location