June 06, 2024

Navigating the commercial real estate market in Kolkata

Kolkata is very much in the middle of a boom in the commercial real estate market, which is powered by a clutch of new businesses setting up shop in the city and many existing ones expanding operations, to go with strategic infrastructure developments including the new Metro lines offering fast and smooth connectivity across the city.

However, make no mistake, navigating your way through the commercial real estate market is a huge challenge. To face up to it, you will need to plan meticulously based on your business needs, costs involved, the ideal location, long-term expansion plans, market outlook, legal aspects, etc. The goal must be to find a commercial property that allows your business to thrive.

Here are some essential guidelines to navigate this segment:

# Ideal location: Location is the key that can unlock the route to your business success. Choose a strategic location that gives you capital appreciation as well as incremental rentals. Also consider where your customers are, better accessibility for staff, amenities offered and of course, the growth potential of the area down the line. A prime or downtown location also gives you extra leverage with banks for loans.

# Connectivity: Easy connectivity to other key locations like airport, train stations, CBD, etc. boosts the value of your commercial property. It ensures more and frequent footfalls since your location would then likely have a plethora of other attractions in the form of restaurants and cafes, pubs and clubs, shopping malls and other entertainment options.

# Infrastructure: Easy access to basic infrastructure and amenities like 24x7 power backup, clean drinking water, high-speed internet, state-of-the-art security systems and protocols, ample and comfortable parking space, adequate number of elevators/escalators, washrooms, etc. is an absolutely vital requirement for your commercial property. So, don’t forget to check these out.

# Structural integrity: Make sure that the property is structurally stable and if it’s a resale one, check for the wear and tear it has endured. It’s always wise to seek the guidance of a structural expert while evaluating the strength and stability of the construction.

# Fix a budget: You must have some kind of a ceiling in mind in terms of budget, since you might be required to fork out up to one-fourth of the agreed price tag as initial payment. Make sure you don’t stretch yourself beyond ideal capacity, since there will always be a more favourable window of opportunity round the corner. Also, scan for hidden costs so that you aren’t dealt a rude surprise.

# Flexibility: A great leverage is the flexibility to expand or lease out the commercial property at a later date as you deem fit. This leeway gives you an edge over your competitors since you can ride the tailwinds in the market should the opportunity present itself.

# Beware of litigations: Make sure there are no ongoing litigations on the property you are investing in. In case there are any legal snags, it could set you back by years and lakhs. Your real estate advisor or lawyer can go through all the documents with a toothcomb to make sure any lurking litigation doesn’t come back to bite you. Also check on the documented usage of the property you are investing in.

While navigating the challenges in commercial real estate transactions, the importance of property consultants can never be overemphasized. From homework to negotiation to transaction facilitation, property consultants can play a pivotal role by ensuring a smooth and successful transaction.

In Kolkata, some of the commercial real estate hotspots include: Sector V, Salt Lake, Chowringhee area, Rajarhat, New Town and Kasba industrial area.

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