Retail Real estate are assets wherein investors can invest in retail stores ranging from shopping malls to individual businesses.
The Retail Real Estate market has progressed significantly to become one of the most dynamic and rapidly rising industries. According to CBRE, residential real estate provides up to 1.5% – 2.5% returns whereas retail real estate provides about 6% – 8% returns on investment per annum. Historically, because of the inconsistency in supply, investing in a retail space was slightly riskier, but over the past few years, the market for retail real estate in India has gone through some significant changes which has helped it grow.
One big benefit of retail real estate is the diversity among the tenants. As stated, retail stores range from Shopping Malls to local general stores, cafes or restaurants. This provides a variety of tenants for the investors to invest in and they can choose their tenants carefully and invest where they feel confident.
Retail Real Estate leases generally range from three to fifteen years, which promises a steady income with a lock-in period of minimum three years. Additionally, there is no fear of tenants dropping out randomly as the property is leased for a specified duration.
Post-COVID, many investors were concerned about the fact that retail real estate would completely die out and online shopping would prevail, but retail real estate market has bounced back stronger than ever and has proved that good returns can be received by investing in them as rents have also stabilised.
Retail real estate is a wise alternative for someone who is considering a long-term investment strategy because it offers strong returns along with high capital appreciation, which boosts the investor’s confidence.