Seize commercial real estate investment with these 6 opportunities

Amidst market volatility, astute investors are turning their gaze towards lesser-known avenues for wealth creation. Commercial real estate stands out as a robust alternative, boasting potential tax advantages, inflation insulation, and a buffer against market unpredictability, say experts. 

According to a Mordor Intelligence analysis, the commercial real estate market is currently worth $67.08 billion in 2023, with an expectation of reaching $223.25 billion in 2028, increasing at a CAGR of 27.19 per cent. The research shows that commercial real estate has become an appealing investment opportunity due to its long-term potential.

Several overlooked opportunities have emerged in the sector, offering both seasoned and novice investors avenues to diversify and expand their portfolios.

Flex warehouses

"The Indian flexible space market is set to grow due to businesses embracing adaptable and cost-effective solutions. Colliers predicts flexible spaces in occupier portfolios will rise from 5 to 8 per cent (pre-COVID) to 10 to 12 per cent in 2023. Currently at 6.5 per cent, the increase is attributed to hybrid work trends and cost-effective workplaces," Pranndeep Singh, Director, White Flower Developers told Republic.
"These versatile spaces, combining storage and office premises, are tailor-made for modern businesses grappling with intricate supply chain dynamics. Beyond conventional warehousing, they offer a dynamic solution for companies in need of both storage facilities and customer-facing areas," said Suren Goyal, Partner, RPS Group.

Commercial real estate is surging with a 27.19% CAGR | Image credit: Unsplash

Parking lots

Parking lots are low-maintenance properties can be operated directly or leased to third-party operators. With dynamic pricing strategies that can adapt to the flow of demand, investors can potentially magnify their returns.

Commercial real estate is surging with a 27.19% CAGR | Image credit: Unsplash

Self storage

Self-storage sector consistently outperforms other segments of real estate, especially due to its resilience during economic downturns. "Often flying under the radar, self-storage facilities provide consistent returns that appeal to investors seeking stability in an unpredictable world," said LC Mittal, Director, Motia Group.

Cell towers

Cell towers are another lucrative investment opportunity. "The expanding reach of cell service into rural areas has transformed these structures into income-generating assets. By providing an essential service while securing a long-term revenue stream, investors are capitalising on the growing demand for seamless connectivity," Mittal added.

Commercial real estate is surging with a 27.19% CAGR | Image credit: Unsplash

Senior living facilities

The increasing number of people aged 65 and above in the country has given rise to a rapidly expanding market - senior living facilities. "This offers a promising investment prospect as more elderly individuals are searching for long-term housing options that are customised to their requirements," Goyal highlighted.

Mobile home parks

Mobile home parks stand as a source of passive income, say experts. Mobile parks are positioned as an opportune investment choice.
"In a landscape where diversification is a key strategy for managing risk, these underappreciated sectors are gaining traction as investors recognise the potential for long-term growth and stability. By embracing these less travelled avenues, portfolios can gain depth and resilience, potentially insulating against the uncertainties that often characterise financial markets," Goyal asserted