Guide for Chandigarh Commercial Real Estate Investment
Chandigarh serves as the joint capital of Haryana and Punjab. It is one of the earliest planned cities in India after Independence. As a result, Chandigarh is renowned internationally for its unique urban design and structure.
Manufacturers and IT industries play a pivotal role in boosting Chandigarh’s economy. This city’s industrial belt stretches over an area of approximately 1262.14 acres approximately. This belt is divided into two plots- Phase 1 and Phase 2. This city is a fully developed area with 1966 plots dedicated to industrial development.
Its economic development and infrastructure make Chandigarh one of the most expensive real estate markets. As such, investments in commercial real estate can be quite lucrative.
Top Reasons to Invest in Chandigarh Real Estate
Here are a few reasons for you to consider investing in commercial real estate in Chandigarh:
Wide and well-maintained roads cover the city of Chandigarh, offering easy transportation to everyone here. Expressways like NH 5, NH 152, and NH 7 connect Chandigarh to other main cities of Punjab and neighboring states.
Furthermore, the Chandigarh Junction offers excellent rail connectivity to other regions of India.
- Booming IT hub
Owing to overpopulation in neighboring cities, major information and technologies are shifting to Chandigarh. This enhances employment opportunities in this region.
Chandigarh Administration has set up the Society for Promotion of IT in Chandigarh (SPIC) to attract more IT sectors to this city. Therefore, there will always be a demand for urban office spaces in Chandigarh to fit the needs of these big and small companies.
- A Clean City
All public properties in Chandigarh, including buses, bus stops, roads, and parks, are clean and well-maintained. As the earliest fully-structured city, all localities here are designed systematically.
Purchasing commercial properties here, like office spaces or plots for resorts, will help you earn a substantial return on investments.
Commercial Real Estates Opportunities to Invest in Chandigarh
Here are some locations in Chandigarh you may consider while investing in commercial properties in this region:
Zirakpur is a small town situated near the Chandigarh-Ambala highway. You can also access Zirakpur via the Patiala-Shimla highway. This satellite town of Chandigarh opens up opportunities to earn high revenues through commercial real estate investments.
Zirakpur houses well-maintained office spaces and properties for retail stores. Orbit Signature Walk and Motia’z Royal Business Park are prominent office spaces here. Similar business parks and mall projects are being developed, promising an urban office-culture outlook.
The rent for commercial properties in Zirakpur ranges from approximately ₹31 lakh – ₹1.45 crore.
- New Chandigarh
New Chandigarh stands out as Punjab’s first smart city. It houses many residential complexes, business parks for upcoming IT companies, and parks and lakes to attract tourists.
A Singapore-based company has laid down the master plan to redesign New Chandigarh. This city strikes a balance between nature and urban infrastructure. Therefore, it is also famous as Eco City.
The price for commercial properties in New Chandigarh ranges from ₹41 lakh to ₹4 crore approximately. This means that there are chances for high ROI from commercial properties in New Chandigarh.
Things to Consider before Buying Commercial Property in Chandigarh
Here are some points you need to consider before investing in commercial real estate in Chandigarh:
- Location and Connectivity
Before investing in a plot or property, consider researching its location and proximity to railway stations and airports. Location plays a major role in determining a property’s value among tenants.
For instance, properties near educational institutions can work as prominent hostels or co-living spaces for students.
- RERA Authentication
The Real Estate Regularity Authority (RERA) Act 2016 monitors discipline and transparency in the real estate business. It mandates the formation of RERA authorities in every state to overlook transactions that happen here.
Every builder or broker in Chandigarh should register their properties under the RERA portal on Punjab’s official website. You can verify the authenticity of your shortlisted properties in Chandigarh there.
If you are planning to invest in an under-construction building, consider researching the builder’s past works and records of successful projects. Also, remember to cross-verify the data provided by the builder by contacting previous investors.
- Lease Structure
A lease is a legal document that binds investors and builders under specific clauses. As investors, you need to have an elaborate idea of a lease structure. This will safeguard you from the risks of unforeseen situations. Also, having a clear idea of the lease document reduces the chance of the opposite party exploiting you with any loophole in its clause.
Consider seeking help from a legal advisor to understand the lease structure before investing.
Stamp Duty in Chandigarh
The table below displays stamp duty charges applicable to properties in Chandigarh:
|Category||Stamp Duty Rate|
|Exchange and transfer of lease deeds||3%|
|Mortgage deeds with possession||3%|
|Mortgage deeds without possession||1.5%|
|Lease deeds of 1-5 years||1.5%|
|Lease deeds of 1-10 years||3%|
|Lease deeds of 1-15 years and 1-20 years||6%|
Registration Fees in Chandigarh
Here are the registration charges for commercial real estate in Chandigarh
|Male||1% of the value of sale document|
|Female||1% of the value of sale document|
|Joint (Male+Male)||1% of the value of sale document|
|Joint (Male+Female)||1% of the value of sale document|
|Joint (Female+Female)||1% of the value of sale document|
Chandigarh Commercial Real Estate- What’s the Forecast?
Chandigarh hosts manufacturing industries of auto and tractor parts, paper, sanitary fittings, steel fabrications etc. It is also growing as an IT hub. Taurus Agile, Wipro, Infosys, Erricson, Tech Mahindra and Reliance Communications are some of the IT companies that have set up their offices here.
After Phases 1 and 2, Chandigarh Complex Development Plan is taking the initiative to set up industrial zone Phase 3. This will open gates for more industrial development in Chandigarh. Furthermore, the strategic location of these industrial and business parks near National Highways offers scope to attract more investors to this city.
New Chandigarh offers an uninterrupted power supply and many other facilities to support an elegant lifestyle. Moreover, the requirement for office spaces and retail stores offers endless scope for investment in this region.
Commercial Real estate vs Other Assets
Given below are the differences between commercial real estate and other assets based on ROI.
Commercial Real Estate vs Gold
Commercial real estate can earn a higher return on investments than gold. However, buying and selling gold is more accessible than commercial properties. Also, gold is a more liquid asset than commercial properties.
Commercial real estate vs Stocks and Mutual Funds
The stock market is highly volatile, and investors must understand this marketplace before investing. Here, investors can gain high returns if they can take high risks of losses. Whereas investing in commercial real estate in Chandigarh promises stable returns over time.
Commercial Real Estate vs Residential Real Estate
Commercial properties are more expensive than residential real estate, so the former yields higher returns on investment. However, finding tenants for commercial property is time-consuming. Also, investors are at higher credit risk with commercial properties than with residential real estate.
Commercial Real Estate vs Bonds
Bonds have a more liquid market than commercial real estate. However, both are excellent sources of passive income. Bonds do carry lower risks compared to real estate investments.
The table below depicts the different asset classes based on their liquidity, volatility, ticket price, and risks.
|Parameters||Commercial Real Estate||Stocks and Mutual Funds||Gold||Residential Real estate||Bonds|
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Steps to Invest in Commercial Real Estate in Chandigarh
Here are the steps an investor must follow to invest in commercial real estate in Chandigarh:
Step 1: Finalise your budget to invest in commercial properties in Chandigarh.
Step 2: Conduct thorough research on potential locations and properties to know about their future potential.
Step 3: Shortlist a few commercial properties that fit your budget.
Step 4: Opt for on-site research to closely analyse the property and its locality. Consider seeking help from a real estate advisor to learn about prospects in the area.
Step 5: Finalise a commercial plot or property that suits your budget and investment goals.
Step 6: Check the authenticity of documents like Title Deed, Foundation Certificate, and Property Assessment Extract provided by the seller.
Step 7: Complete the formalities regarding stamp duty and registration charges to transfer the property under your name.
Step 8: You need to pay service fees to brokers or real estate consultants for availing their services.
Step 9: Cover your newly purchased property with an insurance plan. This will safeguard you from any major financial loss in case of any damage to your property.
Chandigarh’s strategic design, environmental preservation and industrial growth have helped it achieve world-class status. This attracts several big and small industries to this city. Thus, investors will always have the scope to benefit from commercial real estate in Chandigarh. Before investing, investors should keep in mind to check the property’s location, age, registration and RERA compliance.
Frequently Asked Questions
Why is it important to register my properties in RERA?
The Real Estate Regulatory Authority is set up to support transparency and uniformity in real estate industries. This body works to prevent fraud and project delays in real estate transactions. Every commercial and residential property owner must register their properties under the RERA portal of their respective states.
Is New Chandigarh a good place to invest in commercial real estate?
As a smart city, New Chandigarh is attracting several big and small firms to its heart. As a result, there is a growing demand for office spaces, banks, restaurants and hotels. Therefore, investors can invest in New Chandigarh to gain high ROI.
What is Stamp Duty?
Whenever an individual sells a property, he/she must pay a particular tax called the stamp duty. Section 3 of the Indian Stamp Act 1891 elaborately details stamp duty payable by property owners. Each state of India possesses different stamp duties. Therefore, a seller must pay this tax per the property’s location.
What are the prime areas in Chandigarh to invest in commercial properties?
New Chandigarh, Mullanpur, Zirakpur, VIP road and Dera Bassi are a few important areas for an individual to invest in commercial properties in Chandigarh.