Commercial Real Estate Investment in Warangal
A historically rich city, Warangal was the capital city of the Kakatiya Dynasty established back in 1163. Being one of the oldest cities in India, it is rich in heritage and culture. Today, Warangal is the 2nd fastest-growing city in Telangana with a thriving textile and agriculture industry.
Warangal hosts a long list of architectural monuments and geographical places of interest like lakes, fort, historic structures, etc. As a result, it has a vibrant tourism sector, which drives commercial activities in this city.
Warangal is also popular with a few of its educational institutes like the National Institute of Technology (NIT) Warangal. For those seeking employment, there are around 1,366 MSMEs in Warangal in sectors such as textiles, leather tanning, furniture, electrical machinery, transport equipment, etc.
For all these reasons, the demand for commercial properties in Warangal is significantly high and it can offer you high returns if you invest in a prime area. To understand the potential of the commercial real estate market here, keep reading the information given below.
Top Reasons to Invest in Warangal Real Estate
Warangal is a good option for you to invest in commercial properties due to the reasons mentioned below.
- Smart City
Warangal is one of the fastest-developing smart cities among the 100 smart cities listed under the Government of India’s initiative. The Telangana Government has taken the initiative to develop the business industry of Warangal at par with Hyderabad. As a result, the real estate sector in this city is set to grow rapidly in the coming years.
- Hospitality Industry
Warangal is also a popular tourist spot which attracts many people to this city. This city hosts some of the best historical monuments in India such as the Thousand Pillar Temple, Bhadrakali Temple, Ramappa Temple, Warangal Fort, etc. The tourism sector in this city is big enough to be a major contributor to the state’s GDP (Gross Domestic Product).
Therefore, the scope for hotels and restaurants is vast here. This gives the commercial real estate sector in Warangal a wide opportunity to grow your wealth.
- Textile Hub
Warangal is one of the leading textile hubs in India. It is the largest cotton-growing city in Telangana state. It is the largest producer of long-staple cotton and produces more than 50 lakh bales annually.
The Telangana Government aims to develop a full-fledged textile park in the city with 1,190 acres of land area. The potential of the textile industry in Warangal will also increase opportunities for commercial real estate developments in this area. Hence, you can consider investing in a commercial property here.
- Passive Income
Owning a commercial property in Warangal can be a source of stable passive income. The recent growth of industries like textile, IT and hotels will create a higher demand for rental spaces which you can capitalise on to earn high rental yields.
Commercial Real Estate Investment Opportunities in Warangal
The best places to invest in a commercial property in Warangal are listed below. If you want to purchase real estate in this city, choosing these areas will likely net you profitable returns.
Being in close proximity to the NH-163, Hanumakonda is one of the best areas in Warangal to invest in commercial properties. It is an urban zone with modern amenities and a fast-growing business sector. Moreover, residents can easily access bus services in this locality for transportation. The popular Kakatitya University is situated in Hanumakonda.
The average cost for a commercial property in this area is approximately ₹50 lakh.
- Lashkar Singaram
It is a fast-developing locality in Warangal with close connectivity to Warangal Airport via roadways. Its proximity to the airport makes it an excellent location for setting up commercial ventures. Thus, it is a good area for commercial property investment. To buy a commercial property in Lashkar Singaram it will cost you around ₹50 lakh on average.
Things to Consider before Buying a Commercial Property in Warangal
If you want to invest in commercial real estate you must consider several crucial factors that affect your investment quality and the prospect of returns in the future. As real estate investment is a long term commitment with heavy financial investment, it is very important to carefully consider the following points before you invest:
- Lease Contract
While finalising your property in Warangal, you should carefully inspect all details included in the lease agreement. It bounds you to certain responsibilities and agreements that will affect your investment in the future. Thus, you should make sure that the terms and conditions of the agreement are in your favour.
- Infrastructure Availability
Commercial properties that have advanced infrastructure and amenities carry higher demand and offer better returns to investors. Properties located near hospitals and other facilities are preferred over other options in any city. Thus, you should consider the quality of local infrastructure before investing.
A property developed by a reputed builder has better future value as people generally trust established developers more than others. In addition, reputed builders do not compromise on the quality of construction which assures you of the quality of your property.
Connectivity is an important factor for commercial real estate properties. People invest in a property that has fluent connectivity with the rest of the city or state. Thus you should invest in a property with good connectivity and good service of public transportation.
- RERA Verification
According to the Real Estate Regulatory Authority Act, 2016, all states must have a Real Estate Regulatory Authority (RERA) body to govern all real estate brokers, developers and projects. Its objective is to keep real estate investment transactions transparent and safe.
Thus, according to RERA, all properties and their builders and brokers are required to be registered on the RERA database. In addition, all updates on the property’s completion should be provided on time. Hence you should always check the information about your selected property from the official website of RERA Telangana.
Stamp Duty in Warangal
Check the table below to know about the different additional charges that are included while buying a commercial property in Warangal.
|Category||Stamp Duty Charges|
|Sale of immovable property||4%|
|Sales agreement with possession||4%|
|Sales agreement without possession||0.5%|
|Apartments/flats, including semi-furnished, in all areas||4%|
Registration Charges in Warangal
Registration charges for commercial properties in Warangal are mentioned below.
|Sale of immovable property||0.5%|
|Sale agreement with possession||0.5%|
|Sale agreement without possession||0.5%|
|Apartments/flats, including semi-furnished, in all areas||0.5% (minimum: ₹1,000 and maximum ₹20,000)|
Warangal Commercial Real Estate Sector: What’s the Forecast?
Warangal has seen rapid industrial development in recent decades and thus, it is a popular place to set up new businesses. Furthermore, a slew of development projects has been announced to improve the economic growth of this region.
The State Government is exploring options to develop the IT sector in the city by establishing a Software Technology Park of India (STPI) in Warangal NIT. This will increase the demand for commercial spaces in this city in the near future.
The Enamamula Grain Market in Warangal is known to be the largest in Asia which offers a good opportunity for warehouse and other related commercial spaces in Warangal. Recent developments are taking place to set up an 85-acre IT Park in Bheemaram and a mega Textile Park in Sangem and Geesugonda.
The cotton and rice industry in Warangal is also developing further increasing opportunities for business and demand for commercial property. Hence, it is a good time for you to invest in a commercial space in this city.
Commercial Real Estate vs Other Asset Classes
Before you invest in a commercial property in Warangal, check the various other asset classes you can invest in to grow your wealth. The information below provides a detailed comparison of different asset classes.
- Commercial Real Estate vs Bonds
Bonds are fixed-interest assets that offer low-moderate returns by taking low-moderate risks. Bonds are offered by companies in exchange for funds for business activities. These are suitable for investors to park their excess funds for a comparatively short term.
Commercial real estate on the other hand offers high returns for moderate risks in the long term. However, ticket size for commercial real estate is much higher than bonds in comparison.
If you want to invest in bonds with high credit ratings, refer to the list of bonds available on our homepage.
- Commercial Real Estate vs Stocks & Mutual Funds
Stocks and equity mutual funds are high-risk market instruments that are highly volatile but offer the potential for very high returns. These assets offer the highest return rates in comparison to all the asset classes, but also carry the highest risk due to market influence. Commercial real estate offers moderately high returns with low-risk factors in comparison to stocks and funds.
- Commercial Real Estate vs Gold
Commercial real estate offers moderately high returns with low risks and also offers an opportunity to get additional income in the form of rent. Gold is a safe market instrument with moderate appreciation value on investment over the long term.
- Commercial Real Estate vs Residential Real estate
Residential real estate is a stable investment with lower returns in comparison to commercial real estate. However, it offers certain tax benefits that are not offered by commercial properties.
The table given below compares the above assets based on returns, liquidity, risk, volatility and ticket price.
|Parameters||Commercial Real Estate||Stocks & Mutual Funds||Residential Real Estate||Bonds||Gold|
Steps to Invest in Commercial Real Estate in Warangal
Investing in a commercial property can be a challenging task if you do not plan your investment journey well. If you want to buy a commercial property in Warangal, you should follow the detailed steps given below.
Step 1: Plan and fix a budget for your commercial real estate investment before you do anything else.
Step 2: Appoint a broker to help you get the best available commercial property investment opportunity in Warangal.
Step 3: Conduct market research for your investment and take note of the current real estate market trends in Warangal. Also, stay informed about the standard market rates.
Step 4: Visit a few properties and shortlist the ones you like. Check all amenities and other facilities in person.
Step 5: Finalise a property for your investment.
Step 6: Check all the details of your property from the RERA website and ensure it’s a good investment for you.
Step 7: Complete all necessary documentation formalities as per the State Government’s requirements. Also, check the authenticity of documents provided by the seller.
Step 8: Complete payment for your property and pay your broker’s commission.
Step 9: Complete the registration process and pay the required amount for stamp duty and registration.
Step 10: Lastly you should get insurance for your commercial property in Warangal to keep it safe from unforeseen financial threats.
Warangal is a focal point for development in the state of Telangana. The State Government along with support from the Central Government is planning to implement several initiatives to improve the infrastructure and economic standards of this city.
The agricultural and textiles sector along with the growing IT sector is a strong motivator for commercial real estate development in this city. If you plan to invest in a commercial property in Warangal, you can consider investing now.
Frequently Asked Questions
What was the former name of Warangal?
When Warangal was the capital of the Kakatiya Dynasty, it was known as Orugallu. It is believed that the city was carved out of a single rock and hence, it was called Orugallu which means ‘one stone’.
What factors affect stamp duty charges in Telangana?
There are two main factors that affect the stamp duty charges in Telangana. These factors are- a) The type of property which can be commercial or residential and b) the location which is either urban or rural.
Can you get tax benefits from paying stamp duty and registration charges?
Yes, you can get tax reductions from stamp duty and registration charges as per the provisions of Section 80C of the Income Act, 1961. However, the maximum allowed amount as a deduction from these charges is ₹1,50,000.
Can you skip paying stamp duty in Telangana?
No, if you do not pay stamp duty charges the transaction is not legally valid in the books of the government and hence, it has a risk of loss of possession. In addition, you will also be charged with a penalty for failing to pay stamp duty charges as it is a mandatory procedure.
Is GST included in the stamp duty charges in Warangal?
No, stamp duty charges are not inclusive of GST while buying a commercial property in Warangal. As the two taxes are of different categories, they need to be paid separately if there is a requirement for it.