High street retail to generate better returns in real estate investments, say experts

Investors with holding power will earn good returns in commercial or retail investments in real estate, says Salil Kumar, Director, Assotech Realty.

Kumar said that for a long term investment in retail will always be a good option. “But if it is mall versus high street then high street will give you a better return”, added Kumar. He was speaking at Realty Webseries, a Realty & More and ICCPL initiative.

Amit Raheja, CMD, Wealth Clinic went a step ahead and said retail is the FD of real estate. “One thing you should see is what is the catchment area where the retail is coming, that is very important when you invest in real estate”, said Raheja.

On commercial office space rentals post Covid, Abhi Batra, Director, Buniyad Group said there will definitely be a movement and restructuring of tenants from one property to another. Batra further explained that when tenant moves from a Tier A to a Tier B property, there will also be somebody who will move from a Tier B property to a Tier C. “So you will see a lot of people going back and forth between these locations”, said Batra.

On developers’ ongoing assured return schemes, Khair Ull Nissa Shah, ED, WTC said that they have come with a formula for assured returns.  Khair informed that for 3 years the investors will be we will be paid 50 per cent which will be adjusted against their payables. This, she said, will be till possession. “We are making an adjustment, we are restructuring. We had a chance of going for Force Majeure, but we haven’t gone for that. February 2021 onward we will start the adjustment payments, till the time we handover the property”, added Khair.

Speaking at the Webinar, Ajay Rakheja, National Head – Commercial Real Estate – 360 Realtors, said predominantly smaller offices under Rs 50 lakh ticket size are in higher demand to invest. “Demand is for ready to move in or with a last mile completion, where investors can make their own presence, may be for their own use, may be they can rent it out, may be they can keep it as saving portfolio and square it off at a later date”, said Rakheja.

On asking about the impact of job cuts and salary cuts, Supriya Chatterjee, Senior Director – Leasing Services, Cushman & Wakefield said, it is a short to medium term problem and cannot be ignored. But she added that once life becomes normal, there is a certain urge as a human psyche to go out, spend money, meet colleagues, and interact with clients face to face. “Virtual tours are excellent, everything is good, but the keyword here is balance”, said Supriya.

Amrendra Shukla, National Head, Sales, OLX India said as developers are already working on single digit margins, primary property market will take over secondary. “So it is more likely to get a better price in primary than in secondary because when someone is selling in the secondary market, he is also adding up the interest he is paying to the banks”, said Shukla.