Investors prefer single-owned and managed commercial properties
June 17th, 2024
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Mumbai: Investors in India’s commercial real estate market are
increasingly preferring singleowned and managed properties over
strata-owned ones as they offer
higher returns, operational
efficiency, and greater
attractiveness, according to experts.
The rental yields for commercial assets across key property markets have been a major
indicator that clearly shows that single-owned commercial properties are outperforming
their strata counterparts that have multiple owners and operators.
These assets in pockets of key regions such as Mumbai, Bengaluru, Pune, Gurgaon,
and Chennai have demonstrated rental yield advantages of up to 32%. For example, in
Pune’s South West region, single-owned properties showed an 18% higher rental yield
compared with strata properties, while in Chennai’s Southern Suburbs II, the difference
was 32%, showed data from CRE Matrix.
"Grade A commercial assets, managed through proactive asset management, attract top tenants. Strata
buildings do not demonstrate the energy, upkeep, or connect with customers, which is necessary in a
business landscape that sees constantly evolving consumer behaviour,” said Vinod Rohira, MD &
CEO, commercial real estate, K Raheja Corp. “This distinction ensures that single-owned assets attract
top-tier occupiers, who prioritise reliability in services, utilities and overall experience, safeguarding
their business operations and talent retention efforts.”
According to him, tenants are willing to pay a premium for quality office assets, an achievement
realised only by single-owned asset managers.
One of the critical advantages of single-owned properties is operational efficiency. Single ownership
allows for centralised management, which facilitates quicker decision-making and more effective
property maintenance.
“Single owned buildings are relatively younger in age as institutional investment in real estate started
around 20 years ago. At a Pan India level, single owned buildings are 20% younger than strata-owned
buildings and this difference gets even bigger when we see those micro-markets where the delta in
rentals is even higher,” said Abhishek Kiran Gupta, CEO & Co-founder, CRE Matrix.
According to him, the overall quality of a single-owned building is better perceived than a strataowned building as the developer has built it and maintains it to last longer for his own perpetual
revenue stream.
This streamlined approach, according to experts, ensures that properties are well-maintained and can
quickly adapt to market demands or tenant needs. In contrast, strata properties often face management
challenges due to multiple owners, leading to delays in maintenance and decision-making processes.
Occupiers are increasingly leaning towards single-owned properties due to the consistent and reliable
building management they offer. Single ownership ensures that the property is managed with a unified
vision, which translates to better maintenance and faster resolution of issues.
This reliability enhances tenant satisfaction, making single-owned properties more appealing to highquality tenants and ensuring higher occupancy rates.
Single-owned properties tend to maintain and even increase in value more effectively than strata
properties. This value retention is attributed to the cohesive management and unified strategy for
property improvements.
A single-owner can implement upgrades and market the property with a clear and consistent strategy,
directly impacting the property’s market value positively. Investors are also recognising the benefits of
single-owned properties, including higher returns and better value retention.
The operational efficiency and higher tenant satisfaction associated with single ownership make these
properties a more attractive investment. Occupiers, on the other hand, prefer the reliability and
consistency of single-owned properties, which translates to a better overall experience.
Source: realty.economictimes.indiatimes.com
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