Commercial Real Estate Investment in Ahmadnagar
Table of Contents
Ahmednagar or Ahmadnagar is a city located in the northwestern Indian state of Maharashtra. With an area spanning 17,048 km², Ahmednagar is also the largest district in the state. Economic observers have stated that the city which is the headquarter of the district by the same name, has massive untapped potential for economic growth.
An interesting thing to note about Ahmadnagar is that the city is the birthplace of the first industrial cooperative venture in Asia. Today, this city is the backbone of Maharashtra’s rural economy with a huge concentration of manufacturing industries present in it.
The Maharashtra Industrial Development Corporation (MIDC) area in Ahmednagar hosts over 200 industries including brands such as Crompton Greaves, Sun Pharmaceuticals and Larsen & Toubro. The district is known for
Let us explore the important points regarding commercial real estate investment in Ahmadnagar.
Top Reasons to Invest in Ahmadnagar Real Estate
Here are the reasons why you should make commercial real estate investments in Ahmednagar:
- A Strong Manufacturing Sector
The city boasts of a strong manufacturing sector with 19 sugar factories that form the economic backbone of this city. The highest number of sugar cooperative factories in the entire state is located in Ahmednagar. In addition, there is a huge number of manufacturing industries in the city providing employment to over 1 lakh people.
- The Education Sector
Mahatma Phule Krishi Vidyapeeth (MPKV) and Vehicles Research & Development Establishment are located in and around Ahmadnagar. As a result, the city sees many young students, researchers and professionals coming in from neighbouring towns and cities. So, you can consider investing in commercial establishments such as multi-family dwellings, and eateries catering to young people.
- Visited by Tourists
Many bird watchers flock to Ahmadnagar as the Maldhok Bird Sanctuary is located nearby. Moreover, this city has a rich history being the centre of various historical kingdoms. Some of the famous historical monuments in Ahmadnagar are the Faria Bagh Palace, Damadi Masjid, Ahmednagar Fort and Kot Bagh Nizam.
Leveraging this opportunity and investing in a commercial space that would cater to these tourists would prove to be beneficial for investors.
Commercial Real Estate Investment Opportunities in Ahmadnagar
You can consider making commercial real estate investments in the following places in Ahmednagar:
You can consider investing in a commercial property located in Nalegaon. Known landmarks in Nalegaon are Yash Clinic, Asha Multiplex and Agarwal Packers & Movers. There are shopping complexes, parks and banks in this locality as well. The prices of commercial properties can go up to ₹14,143 per square foot in Nalegaon.
You can also invest in commercial lands or properties in Sangamner. It is an industrial hub housing the cloth industry, and tobacco and sugar factories and is well-connected with other cities in Maharashtra. The prices of commercial properties here can go up to ₹17,647 per square foot.
Things to Consider before Buying a Commercial Property in Ahmadnagar
Here are a few factors you need to consider before purchasing a commercial property in Ahmadnagar:
- Infrastructural Development
Check the infrastructural development of a commercial space before you invest. A property with modern state-of-the-art infrastructure will inevitably generate better returns in the future than commercial spaces lacking such facilities. Do not forget to check the electricity, water supply and provisions of the staircase and elevators. Also, check whether CCTV cameras are installed or not as it would address your security concerns.
- Location and Connectivity
Choose a commercial property that is well connected with other major areas in the city as it would help employees and other workers to travel easily. Buying a commercial property in a prime location will also improve your chances of earning higher returns.
- Check Authenticity through RERA
As per the Real Estate (Regulation and Development) Act, 2016, every builder must mandatorily register their properties on the RERA (Real Estate Regulatory Authority) portals of their state. Introducing transparency and accountability in the real estate industry was the underlying objective of the RERA Act.
When you decide to invest in a commercial property in Ahmednagar, do not forget to check the authenticity of the property on the RERA website of Maharashtra.
- Builder’s Past Projects
Do not forget to check how many projects the builder has completed in the past. Checking the credentials of the builder on the RERA portal is a must if you are toying with the idea of investing in an under-construction property. Another important factor you need to consider is whether there are any ongoing legal cases against the property or its builder.
Stamp Duty in Ahmadnagar
In Maharashtra, apart from Mumbai, all other cities share the same stamp duty rates. Take a look at the stamp duty rates in Ahmadnagar:
|Stamp Duty Rates Applicable (w.e.f. April 1, 2022) for Men
|Stamp Duty Rates Applicable (w.e.f. April 1, 2022) for Women
|7% (including 1% metro cess, transport surcharge and local body tax)
|6% (including 1% metro cess, transport surcharge and local body tax)
Registration Charges in Ahmadnagar
Every Maharashtrian city, apart from Mumbai, shares the same registration charge. Let us take a look at the registration charges of Ahmadnagar:
|₹30,000 for properties above ₹30 lakh1% of the property value for properties below ₹30 lakh
Ahmadnagar Commercial Real Estate Sector: What’s the Forecast?
The State Government of Maharashtra is contemplating renaming Ahmednagar to Punyashlok Ahilyadevi Nagar after the famous queen. It is also expected to lay more emphasis on the economic development of Ahmadnagar.
The Maharashtra Industrial Development Corporation (MIDC) is situated on the outskirts of Ahmadnagar and houses 42 large-scale industries. Although the economy of this city is dependent upon the manufacturing sector, the service sector needs to grow as well.
Though the State Government has established an Information Technology (IT) park in the MIDC park, it is yet to see bigger IT companies setting up offices in Ahmadnagar. However, once the administration starts promoting the city as a viable option for knowledge-based industries, the service sector will start contributing to Ahmadnagar’s economic growth.
With the further development of manufacturing industries and the growth of the IT sector, people from neighbouring towns and cities are expected to arrive at Ahmadnagar to build their careers. Commercial real estate investments seem to have a lucrative future amidst such a situation.
Commercial Real Estate vs Other Asset Classes
Take a look at the comparisons between investments in commercial real estate and other asset classes:
Commercial Real Estate vs Stocks and Mutual Funds
Compared to stocks and mutual funds, commercial real estate investments can generate higher returns. Moreover, stocks are subject to market movements and can undergo massive fluctuations in returns. This feature makes it difficult for investors to get a better grasp of the returns they will earn.
Commercial Real Estate vs Gold
Gold is associated with high liquidity which is one of its significant advantages over commercial real estate investments. If you are faced with financial emergencies, you can liquidate gold easily unlike commercial properties. However, it gives much fewer returns than commercial real estate over time.
Commercial Real Estate vs Residential Real Estate
Commercial properties are associated with high rental prospects and are always in demand which is not always the case with residential properties. To be precise, the latter face a lack of demand in the premium category when compared to commercial spaces. But residential properties carry fewer risks and provide better tax benefits.
Commercial Real Estate vs Bonds
While both bonds and commercial real estate are stable sources of passive income, bonds are much more liquid and have a lower credit risk. Tenants of commercial real estate are required to pay lease payments on time which exposes the investment to credit risk. Moreover, it is also difficult for commercial property owners to find suitable tenants.
Here is a tabular representation of the comparison with a special focus on liquidity, risks, returns, ticket price and volatility:
|Commercial Real Estate
|Stocks & Mutual Funds
|Residential Real Estate
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Steps to Invest in Commercial Real Estate in Ahmadnagar
Here are the steps you need to follow to invest in commercial real estate in Ahmadnagar:
Step 1: Decide on your budget, i.e. the amount you wish to invest.
Step 2: Conduct thorough market research about the sites that are developed or will undergo a price increase soon and make a list of those sites.
Step 3: Make a list of the sites that match your budget.
Step 4: Conduct field visits to each of the shortlisted places for a first-hand analysis of the ground situation. You can consider seeking the help of a real estate expert or consultants to better understand the prospects of each of these sites.
Step 5: Select a commercial property based on your investment goals.
Step 6: While purchasing the property, check whether important documents such as the title deed and foundation certificate are in order.
Step 7: To transfer the commercial property in your name, pay the seller and complete the stamp duty and registration formalities.
Step 8: Do not forget to pay the fees to the real estate experts or brokers if you have availed their services.
Step 9: You can also consider purchasing an appropriate insurance policy to lend an added layer of protection.
An important suggestion would be to research well about the risks associated with commercial real estate investment in Ahmednagar before taking the plunge. This city is located in Maharashtra and has a flourishing sugar manufacturing industry. More employment opportunities would be created once the IT sector develops leading to brighter prospects for the real estate sector in the city.
Frequently Asked Questions
- What is the speciality of Ahmednagar?
Ahmadnagar has numerous sugar cooperative factories which are a major growth driver of the city. The cooperative movement in our country originated in Ahmadnagar, so the place holds socio-historical significance.
- Which fruit is famous in Ahmednagar?
Ahmednagar is famous for its Alphonso mangoes. The cities of Maharashtra produce some of the best varieties of mangoes. You can consider investing in a mango orchard in Ahmadnagar as it holds the potential for attractive returns.
- What are the famous tourist places in Ahmadnagar?
Some of the famous tourist places in Ahmadnagar include Shiva temple Parner, five stone gates, Dhokeshwar caves, Kharda fort and Ratangad. Commercial spaces catering to tourists can generate lucrative returns in Ahmadnagar.
- Where can you make commercial real estate investments in Ahmadnagar?
You can invest in commercial properties in Nalegaon and Sangamner in Ahmadnagar as you will be able to receive good RoI (Return on Investment). Both these places are well connected to other areas in the city and the state.