Latest Investment Trends in Commercial Real Estate

Commercial real estate has always been the focus of attention in real estate investment owing to the high yields and the demand for commercial properties. Commercial properties held an equation of high investment bringing high yields. But, the expanding economies have found novel approaches to commercial real estate investment like fractional ownership, crowdfunding, and etcetera that have made investing in commercial real estate painless.

Here are some of the trending Commercial Real Estate investments that have redefined the ways we look at it.

Fractional Ownership

Investing in commercial real estate involves hefty sums and hence was accessible to high net worth individuals only. But the fractional ownership concept has best addressed the concerns of small investors.

The investment for the commercial property is fractionalized into smaller segments that are available for the investors to buy. The investors buy shares of the commercial property and earn fractional ownership.

It has opened the way for investors with small ticket sizes. You can start off with as low as Rs.10 Lakhs and invest in assets that can now build your portfolio equivalent to the ultra-high net worth individuals. Fractional ownership has also made liquidating the commercial property easier when compared to the conventional method of fully owning a property. You can just sell your shares and let the money flow directly into your account.

You can invest in office spaces, data centers, and warehouses which are high on demand. There are multiple platforms like Assetmonk, Strata, and hBits that help you find the properties to invest in high yielding assets.

Crowdfunding

Crowdfunding is an emerging concept in India where various investors pool their money to invest in a property. Through crowdfunding, you can buy a part of the property and earn the return through rentals and capital appreciation.

Through crowdfunding, you can diversify your risk by investing in multiple properties with the same capital that you can use to fully own property. Investing in properties through crowdfunding is a safe option. If enough resources are not pooled, your contribution flows back to you.

Crowdfunding mostly happens through online platforms like Assetmonk. The platforms look out for the properties on behalf of you and provide you with the best deals easing your task.

REITs

REITs, Real Estate Investment Trusts are the companies through which you can invest and buy shares of the company. The company invests in different properties and pays back to you in dividends.

India has recently approved the investments through REITs, in 2019, and has seen a whopping 14% ROI (Return On Investment) and has outperformed the BSE (Bombay Stock Exchange). This proves the credibility of the investment and indicates the expanding market for REITs.

REITs investment is similar to stocks. The REITs shares enjoy lower volatility than stocks as the rental yields through REITs are better predictable than the equity stocks.

You earn through rentals and also through capital appreciation. When the capital appreciates, the value of your shares also increases. You can sell your shares as and when required and procure your returns.

Advantages of the above trends

The trends like fractional ownership, crowdfunding, and REITs have been boon to investors with small budget points. You can start off with a small investment in the asset class properties and enrich your portfolio.

As you get to invest in top-class investments like office spaces, warehouses, through these trends, you earn equivalent yields of greater scales.

These trends have increased the reachability and have also shared access to the masses, increasing the scope of the industry.

You can diversify your risk by investing in multiple properties. If any of the asset underperforms, other performing assets might still nullify the ill-effects of the underperforming assets.

You can earn a steady passive income through the rewarding investments.

The emerging trends are driving the industry into the scales upstream and redefining the investors’ perspective by introducing various investment options. The commercial real estate is an opportunity for a calculated investor as the dynamics of the market can take a heavy toll on your investments. Hence, it is always advised to study the market trends before jumping to make an investment.

The online platforms have a crucial role to play in the trending investment options. They ease the investors’ task by listing the properties online which undergo thorough due diligence and increase the access to the assets. Assetmonk is an online platform which lists out commercial properties that have an IRR of up to 21%. We offer our services at the metropilses across India with different products like Growth, Growth plus and Yield for investors with various ticket sizes. Visit Assetmonk today!