Industrial Property Investments in Bangalore
While thinking of a real estate investment, most prefer residential property or commercial properties. The category of industrial property is something that has often been sub-classified under the category of commercial properties. The term industrial properties can be differentiated from commercial properties as industrial properties are those wherein industrial activities are carried out while commercial properties are those in which business activities are carried out.
In recent times, the commercial and residential real estate sectors had stagnant growth and the industry experts have stated the industrial properties to be one of the best areas to invest. Investments in industrial properties may be a little more expensive than business building and residential properties. By investing in industrial real estate property, you can earn a good amount as rent and a high rate of return. The following section of the article will explain why you should invest in industrial properties along with the different investment options and best places in Bangalore whereby you can invest to maximize your profit on investment.
Why invest in Industrial property?
Here are some reasons why you should invest in industrial properties:
Rate of return
The rate of return in industrial properties is comparatively higher than both commercials as well as residential properties. The price of an industrial property appreciates every year by almost 7-10% and the higher the yield, the higher is the chance for you to have a speedy recovery of the invested amount. This thus allows a long period to reap profit.
Long lease periods
The fact that industrial properties are leased out for a long period is another factor that makes it one of the best ways to invest. Industrial lands and factories are often leased for a long period and this period may be as long as 99 years or so. Even the short-term lease lasts for three years ensuring a smooth cash flow of income for the investors.
Yet another major advantage of investing in industrial properties is that all the expenses and the government charges such as council rate, water rate, land tax, management fee, etc. are met by the tenants. This thus enables the investors of industrial properties to eliminate such expenses and ensure a steady cash flow.
While considering investing in industrial real estate, it is also important that you know the challenges you have to face in investing in industrial properties. One of the major challenges of investing in industrial properties is that it is difficult to find tenants in comparison to residential properties. One major reason for this may be because that tenant requires large funds as security deposit and lease funds.
Different types of Industrial properties
The different type of industrial properties include:
Warehouse and distribution buildings
Warehouses are buildings used for storage purposes. They can be of different sizes (usually large) and located out of city limits. In a warehouse, you can also have more than one storage and a loading dock along with parking facilities and a small office. Bangalore is a popular warehouse spot as it is home to several large companies which operate largely in the IT sector and then in the manufacturing sector. Bangalore’s proximity to the seaport is another reason why the outskirts of Bangalore has been considered to be an ideal location for warehousing facilities.
This is a new addition made to the category of industrial properties and has resulted out of the changing needs of modern times. A flex building is generally large and contains an R&D facility, an office set up, light manufacturing, etc. Bangalore has been a leading player for flex building in India as around 10.6 million sq. ft. has been dedicated to this. The large ITes and start-up companies have been the main drivers for the rising demand for flex buildings in Bangalore. The demand for flex spaces in the future as well as companies will require more and more spaces and this is also one of the best ways to diversify your portfolio if you are planning to invest in industrial real estate properties.
Refrigeration and cold storage
These are units or property options necessary for those dealing with food products as they need to have large refrigeration and cold storage. These types of buildings are often situated along with the state and national highways and a wherein good supply of electricity is present.
Best Place for Industrial real estate investment
Some of the best locations for industrial real estate investments include:
Peenya Industrial Area
Peenya is a very famous industrial area in Bangalore and is one of the largest industrial areas in Asia. It lies on the Bangalore-Tumkur Highway and is home to small, medium, and large-scale industries. The area is well known for its engineering and electrical good industries. Some of the famous companies having their industries in this area include Sandur Fluid Controls Pvt Ltd, Jain Trade Center, Siddhivinayak Industries, Alfeni Metarc Ltd., 3D Concept Tooling (P) Ltd., Mangalam Creations, Cooltronics, BPE BioTree (P) Ltd., Kardex Remstar, Wipro Technologies, etc.
SSI Industrial Area, Rajaji Nagar
SSI Industrial areas are a sub-locality of Rajaji Nagar and fall under the category of Urban districts of Bangalore. It has a population of 2084 out of which the male accounts 1108 and the female population accounts for 976 out of the total. The area is known not only for its industrial base and also include healthcare and educational institutions.
Dadaspete is a tiny town which is located in the Nelamangala Taluk and falls under the category of Bangalore Rural District. It was formerly referred to as the Somapura and is located 50 km away from the Bangalore main city and is located along the national highway. Textron Pvt Ltd, Feildstar Engineering Company, Celstream technologies, Steer Engineering Pvt Ltd, etc. are some of the companies operating in Dadaspete.
Because industrial properties yield high rental values and also appreciate by 5-20% annually, the industrial experts think that it is the best time to invest in Bangalore industrial properties. By investing in industrial real estate you can generate income from warehousing, flex spaces, and also cold storage spaces. The fact that it comes with benefits such as a long term lease period and steady flow of cash makes it one of the best choices for real estate investments.
Assetmonk is an online investment platform offering realty investment opportunities in Bangalore, Chennai, and Hyderabad. We offer our investors a wide range of properties which offers them profitable returns.
Industrial Property Investments in Bangalore FAQ's:
Yes, industrial investments are emerging to be the new most profitable investments in Bangalore. It offers high returns and steady cash flow as the rental of industrial spaces is for a long period which may extend up to 99 years.
Some of the best locations for industrial investments in Bangalore include Peenya, SSI Industrial Area, Dadaspete, DDK Industrial Area, Petechannappa Industrial Area, Kiadb, Bidadi Industrial Area, Dyavasandra Industrial Area, etc.
Peenya is a very famous industrial area in Bangalore and is one of the largest industrial areas in Asia. It lies on the Bangalore-Tumkur Highway and is home to small, medium, and large-scale industries.
The North Bangalore region is developing at a faster pace as several large companies are opting to make their investments in the North Bangalore region. As the number of companies increases, the number of employment opportunities also widens making north Bangalore a hotspot for residential investments as well.