Investment size
For commercial retail, one needs higher investments compared to residential or office real estate. For a standard size retail outlet an investment of Rs.70-80 lakh is required. “But one can buy retail space in a mall with Rs.30-40 lakh. There are 300-500 sq.ft. outlets available in the malls in the form of food stalls, ATMs, florists, travel and money transfer outlets”, says Ramesh Menon of Ground Realty. But then according to Menon, higher entry-level investment is no deterrent as rental returns and capital appreciation are quite high. Investment is much more secured and exit route is easy (one can exit in six months).
Shubrahnshu Pani feels that in the commercial retail real estate smaller investors are obliged to go in for quoted price and as such they have limited bargaining power. But then the investors clubs which are springing up all across the country are proving to be a real boon for the retail investor. Says Lakhotia, founder of an Investor Club “The popularity of such clubs can be gauged from the fact that today we have a membership of 280. Since we buy in bulk, we are able to get a special bargain benefit of 15-24 percent on retail property. There is another advantage of joining such clubs. While for individual investors, investments in retail property is high (Rs.30-35 lakhs), Investor Club members can invest as low as Rs.5lakhs and reap the benefits of high ROI. Now that more and more small investors are realizing the benefits of joining the Investor Club, we are getting number of requests from other cities like Mumbai and Bangalore to set up branches of our club there.
Courtesy realty plus
