What is Best Commercial Property Investment?

I have been investing in real estate for a long time now. And I can say that commercial real estate investments are not very common. But if you are thinking of investing in commercial real estate, I can tell you all that I know about the best commercial property investment.

Which is the

Best Commercial Real Estate Investment?

Real Estate Investment Trusts are one of the best real estate investments. Entities that invest in premium real estate are known as REITs. Commercial real estate, retail establishments, medical facilities, data centres, apartment buildings, etc. are among the properties that REITs invest in. These REITs allow investors to purchase units and take part in their expansion.

Why are REITs the Best Way to Invest in Commercial Real Estate?

• Based on the rentals they provide, REITs aim to provide unitholders with a consistent revenue stream. 

• Furthermore, the underlying properties may also increase in value, which means that their holdings may also profit from capital growth.

• Because REIT units are listed on a stock exchange, unit holders have access to liquidity.

Structure of REITs in India

Similar to mutual funds, REITs are categorised into three tiers in India. 

1. There is an Asset Manager who makes choices about properties to be bought or sold, tenants, and rental agreements, among other things. 

2. There is also a Sponsor, who is usually a property developer; 

3. A Trust, which will hold the properties directly in a business or through a Special Purpose Vehicle (SPV); and so on.

In India, completed commercial properties that are available for rental must make up at least 80% of the assets held by REITs. This is one of the major reasons why the

best type of commercial real estate to invest in is REITs.

The remainder may consist of unfinished buildings or other investments. Unitholders are entitled to receive at least 90% of the income generated by a REIT.

I hope now you know which is the best commercial property investment.