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Commercial Real Estate Rent

Real estate market in India is on the upswing while property builders in India are rapidly investing in all the parts of the country. New constructions in this field are into an all-time growth. Indian property developers are buying plots on a large scale for construction of townships and residential complexes. Real estate investment in India includes residential as well as commercial property like apartments, hospitals, villas, hotels, educational institutions, offices among various others.

 A study of the market trends for commercial property in India has revealed that prices for commercial properties are increasing drastically. Commercial properties in India are also on the rise with their flourishing constructions. Shopping malls, shops, big Corporate Offices, Movie Halls, Amusement and Recreational parks etc all are in for investments by real estate developers in India.

The increase of business has propelled the development of more and more commercial properties in India. To meet the requirements, government is also promoting the development of hotels, airports and other infrastructures. A lot of special economic zones and industrial properties are being approved and developed to promote business in remote regions.
Another aspect of this increasing demand for commercial properties in the metro cities is the strict regulations by the government to stop all commercial activities in the residential areas. The commercial or business activities should only be carried in the commercially approved spaces so that the life in the residential areas is not disturbed. Hence, the demand for commercial space India has gone up remarkably. With increase in demand for commercial space prices and rents have increased drastically.

It is not easy to buy out commercial property in India now as it locks up huge amount. Getting commercial space on rent is the recent trend followed in India. Renting commercial space is best alternative when one is sure about not investing a huge amount behind owning commercial spaces. In fact, real estate developers too are now not interested in selling commercial space, they are trying to rent that space for longer period of time in order to gain benefit of capital appreciation of land in future with heavy cash flowing due to rent coming.

Being a tenant one should know everything about trends of rent following in industry especially with commercial estates. There are several components of rental rate you pay to your landlord. As a commercial tenant apart from the rent that you pay to your landlord there are other payments also; maintenance of building, property taxes, building insurance and management of the property. This doesn’t hold true for all cases as it may depend upon the agreement made between tenant and landlord, but in ideal cases this holds true.

Generally there are two type of rent you will come across when you will be searching for commercial property on rent in India. They are Gross rents and Net rents. Gross rent is an all in rent. A true Gross rent includes all of the mentioned expenses like building insurance, building maintenance, property taxes, management of property, etc. and any other expense that might be particular to a specific property.

Net rent is a type of rent that includes nothing extra. Net rent is the amount that you are paying to your landlord in order to use their property for specific period of time. Entire property if being utilized by single tenant then all other extra costs must be bared by that single tenant. In properties such as office buildings or multi tenant retail malls the Net rent is commonly accompanied by additional rent such as common area and maintenance plus property taxes. All this costs are to be incurred by all tenants on sharing basis. The additional rent covers the expenses mentioned above. The additional rent is usually an estimated amount based on the previous years operating expenses. The expenses are then allocated to each tenant proportionally to the amount of space that they have of the building. So if a building has 10,000 Sq Ft of rentable space, and a tenant has 1,000 Sq Ft retail store, then they would pay 10% of the total expenses. The Additional rent is quoted on a per Sq Ft basis as well.

One should carefully think for the requirement of space needed by them before renting commercial space in India. Other wise it may cost you other extra costs for dead spaces you have with you. Pacifica Companies is leading real estate developers in India. We provide all kind of solution pertaining to real estate. We have 30 years of wide experience in developing world class buildings, malls, IT park, shopping complexes etc.

 

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