Guide for Bhavnagar Commercial Real Estate Investment
Bhavnagar is the 5th largest city of Gujarat and a major commercial hub. Hence, this port city has always been in the limelight for trade and industries.
There are numerous large, medium and small-scale businesses spread around the city. It includes ship-building, ship-breaking, diamond cutting, plastics and marine chemical industries and the biggest ship breaking yard in South East Asia.
Bhavnagar is surrounded by some of the nation’s economic powerhouses, including Ahmedabad and Surendranagar. Moreover, the city is connected to Rajkot and Amreli on the West and has access to the Arabian sea and Gulf of Cambay on the East.
Bhavnagar is dominated by cotton industries, with 2094 industrial units in the Bhavnagar district totalling ₹6,640.73 lakh. It is also home to various commercial, cooperative and rural banks.
The location, connectivity and availability of cheap labour make Bhavnagar an excellent investment option for commercial real estate.
Top Reasons to Invest in Bhavnagar’s Commercial Real Estate
Here are some solid reasons to consider investing in commercial real estate in Bhavnagar:
Connectivity to Prime Locations
The topographical location of Bhavnagar plays a pivotal role in the city’s tremendous growth in business infrastructure. In addition, a well-connected transportation network facilitates easy access to prime locations in Gujarat, such as Ahmedabad, Surat, and Vadodara. You can travel to these locations easily via NH 51 using state-owned public transport.
Furthermore, it connects to cities like Kochi, Trivandrum, Chennai, Bangalore, New Delhi, Kolkata, etc., through the Bhavnagar railways. The city also has the Bhavnagar Airport, which connects Bhavnagar to Mumbai and Pune.
Bhavnagar is one of the major industrial hubs in Gujarat and India. It has 10 in-house industrial areas with over 112 large and medium-scale industries. The city is also the largest salt producer, producing over 34,500 tons yearly.
It is also home to the world’s largest ship-breaking industry at Alang. These industries have been responsible for establishing various services and repair centres, promoting employment opportunities and catering to cheap labour availability.
Economic growth from these industries has increased the demand for commercial real estate in Bhavnagar.
Commercial Real Estate Investment Opportunities in Bhavnagar
Here are some prime locations to invest in Bhavnagar’s commercial real estate
Mahuva is a town in Bhavnagar located on the coasts of the Arabian Sea and is widely considered the “Kashmir of Saurashtra” for its picturesque beaches. In addition, the region is known for exporting high-quality onion, groundnuts and a local variety of mango called Jamadar.
Mahuva is an agri-based industrial hub. The climate In Mahuva makes it the largest white onion and second-largest red onion producer in India. The region is in high demand for setting up food processing units where vegetables can be easily stored and transported, reducing transit losses.
Investors can purchase commercial properties like warehouses and shops and earn significant monthly returns from rents. Prices of commercial real estate here start from ₹1 crore.
Palitana is the only mountain in the world that has 900 temples on it. It is one of the world’s largest temple complexes and a holy place for Jains.
Tourism is the driving force for Palitana’s economy. As a result, Palitana has emerged as one of the most demanding localities to invest in commercial real estate. Investors can purchase hotels and restaurants catering to the needs of Jain pilgrims and tourists.
Prices of commercial properties in Palitana start from ₹18.5 lakh.
Things to Consider before Investing in a Commercial Property in Bhavnagar
The following are some points that an investor should keep in mind before investing in commercial real estate in Bhavnagar
Connectivity and Transportation
Connectivity and transportation are the support structure of any commercial real estate. A proper transport network caters to faster product transit and helps expand the business nationwide . Therefore, investors should always check for easy availability of transportation to some of the prime locations and markets.
Market Growth and Demand
Every locality has its distinct key industry. Therefore, it is always wise to check for the industry’s market growth and demand to analyse potential returns. Furthermore, one needs to understand the industry and its growth prospects before setting up a new business.
Check RERA Authenticity
The Real Estate Regulatory Authority (RERA) is an administrative body formed by the Real Estate (Regulation and Development) Act of 2016. It profiles builders as well as commercial real estate projects and establishes their authenticity.
You may refer to Gujarat’s RERA portal to check for the authenticity of the builder and the commercial property.
Stamp Duty in Bhavnagar
Here is a list of Stamp duties for the state of Gujarat
|Basic Stamp Duty rate||3.5%|
|Surcharge @40% of basic rate||1.4%|
Registration Charges in Bhavnagar
Below are the registration charges for the state of Gujarat
|Property owner||Registration charges (for properties above ₹30 lakh)|
|Female||No registration charges|
|Joint (Female + Female)||No registration charges|
|Male||1% of the property value|
|Joint (Male + Male)||1% of the property value|
|Joint (Female + Male)||1% of the property value|
Bhavnagar’s Commercial Real Estate Outlook
The abundance of industries in Bhavnagar is primarily responsible for the city’s economic prosperity. In addition, its ports along the Arabian Sea enhance the city’s commercial importance. Bhavnagar is also very well-connected by road, rail and air. As a result, it is a preferred destination for real estate investments in Gujarat.
Rapid development is taking place in Bhavnagar, which boosts the city’s real estate market. The Prime Minister has allocated ₹5,200 crores in funds for several projects. It includes the world’s 1st CNG terminal with the world’s 4th largest lock gate system at Bhavnagar.
The port will facilitate upcoming infrastructural project demands. It will develop Bhavnagar’s economy, increasing cargo handling efficiency and generating employment. Moreover, it will provide connectivity to existing highways and railway terminals.
Furthermore, Gujarat Industries Power Company Ltd. (GIPCL) has leased a project for developing a 375 MegaWatt thermal power station at Ghogha, Bhavnagar. The project aims to upgrade the existing electricity connectivity to residential areas and new and emerging industrial warehouses.
The ongoing infrastructural development will uplift the prospect value of the nearby commercial real estate.
Commercial Real Estate vs Other Asset Classes
The points given below highlight the differences between commercial real estate and other asset classes.
Commercial Real Estate vs Stocks and Equity Mutual Funds
Stock markets are volatile. They can either yield substantially higher returns or equal losses. In contrast, commercial real estate is a more stable and safer investment than stocks and equity mutual funds.
Commercial Real Estate vs Bonds
Commercial real estate and bonds both have the potential to provide a stable passive income. Bonds are a more secure investment option and carry higher liquidity than commercial real estate. However, commercial real estate yields higher returns than bonds.
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Commercial Real Estate vs Gold
Gold is comparatively easier to buy and sell and thus carries higher liquidity than commercial real estate. However, commercial real estate usually provides a higher rate of return over time.
Commercial Real Estate vs Residential Real Estate
Commercial real estate requires higher capital than residential real estate. However, the former can provide a proportionately higher return value.
The following table compares commercial real estate with other asset classes.
|Parameters||Residential Real Estate||Stocks & Equity Mutual Funds||Gold||Commercial Real Estate||Bonds|
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Steps to Invest in Commercial Real Estate in Bhavnagar
Step 1: Carefully allocate a budget based on your earnings and expenses.
Step 2: Sort out a few good locations which tally with your allocated budget.
Step 3: Visit the location physically and analyse the prospects and available commercial amenities. You can seek the help of a professional real estate consultant to determine the true value and prospect.
Step 4: Finalise the purchase only after checking the RERA authenticity. Also, make sure to check the documents provided.
Step 5: Pay the stamp duty, registration charges and other related expenses, including payment for the professional brokerage services.
Step 6: Commercial real estate is subject to higher risk from damage. Therefore consider getting an insurance policy.
Bhavnagar is the epicentre of Gujarat’s commercial hub. Moreover, the city provides access to well-developed amenities and commercial infrastructure. In addition, it has access to waterways and land, including the Bhavnagar port, one of India’s prominent business ports.
This city has seen exponential developments over the years. Furthermore, the recent development projects undertaken by the Gujarat Government and other influential infrastructural companies make it one of the most demanding real estate locations among investors.
Frequently Asked Question (FAQs)
What are the best commercial localities to invest in Bhavnagar?
Some of the best localities to invest in commercial real estate in Bhavnagar are, Mahuva, Palitana, Ghogha, and Gariyadha.
What documents do I need to scrutinise before purchasing commercial real estate?
Sales deed, building plan, completion certificate, tax-paid receipt, building approval plan, etc. It is always advisable to consult a professional legal assistant for smooth purchase proceedings.
What are the risks involved in purchasing commercial real estate?
Commercial real estate can yield high returns. However, it is subject to credit risk. Moreover, investors can only enjoy a few tax benefits while purchasing commercial real estate.
Why do I need to check for RERA authenticity?
The RERA (Real Estate Regulatory Authority) eliminates any money exploitation, disputes or unauthorised dealership related to real estate. Therefore, investors must check for RERA authentication before purchasing commercial real estate.