Guide for Alappuzha Commercial Real Estate Investment

Alappuzha located in Kerala houses all the components that give a boost to the growth of commercial real estate investments. The city has secured third position in the literacy rate. In addition, the city was declared to be the cleanest town in India in 2016 as rated by the Centre for Science and Environment. 

The prevailing climatic conditions and geographical locations lead to the development of every industry here. Most Notably, Alappuzha stands out for being one of the popular tourist destinations housing different beaches, canals, backwaters etc., which further adds to the investment opportunities here.

The sections below reflect all the particularities of commercial real estate investments in Alappuzha. 

Top Reasons to Invest in Commercial Real Estate in Alappuzha

Here are the following notable reasons why investing in commercial real estate in Alappuzha is worthwhile.

• Stable Economy

Alappuzha has a striving economy which is mainly based on marine and agricultural products. The district is popular for housing the traditional coir industry. Besides coir, other commodities that are manufactured are glass, copra, coconut oil, marches, mats etc. The easy availability of raw materials backed by canals and backwaters and the proper transportation service have led to the development of numerous industries in Alappuzha. Even tourism here contributes to the economy and gives rise to the development of hospitality industries.

• Backwater Paddy Cultivation

Farming is the major occupation in Alappuzha. Even this place houses Kuttanad which is considered to be the Rice Bowl of Kerala. The notable attribute of paddy cultivation here can be owed to the water level which is a few feet higher than that of surrounding land level.  Three crops are cultivated annually here. Paddy cultivation is a primary source of earnings in this region. One of the sites in the Kuttanad region that have become popular in the farming sector is a Thanneermukkom Bund. 

• Robust Transportation System

The well-connected railways and road networks have also given a boost to commercial real estate investments. For instance, National Highway 66 passes through Alappuzha and connects the city with Udupi, Mumbai, Kannur, Mangalore, Trivandrum, Kollam etc. Alappuzha houses eight state highways which facilitate seamless transportation. Even there are bus terminals here. 

Even the water transportation system is strong in Alappuzha on account of the presence of many canals and backwaters. National Waterway 3 crosses the city. Further, Ernakulam–Kayamkulam coastal railway line connects Alappuzha with Cochin, Trivandrum, Delhi, Mumbai and Chennai. 

• Major Education Centre

Alappuzha hosts many schools, colleges and computer institutes. Some of the major college institutes that are located here are the College of Engineering Chengannur, S. D. V. College of Arts and Applied Science, College of Applied Sciences, Mavelikkara etc. 

Commercial Real Estate Investment Opportunities in Alappuzha

Here are the top locations in Alappuzha that are favourable for commercial real estate investments.

• Kuttanad

Kuttanad is a famous region in Alappuzha that is ideal for commercial real estate investments. Farming is the primary occupation in Alappuzha. The extended horizon of paddy cultivation here has led to the growth of numerous industries. Kuttanad is one of the few regions where farming is done below sea level. It is also a backwater paradise and is bordered by dense tropical greenery.

• Chengannur

It is a municipality town in Alappuzha. The place is referred to as the gateway of Sabarimala. Even the place is well-connected via road and railway networks. National Highway 183 connects Chengannur to Kollam and Kottayam. Rubber plantation is one of the primary sources of earnings here, which has given rise to many small-scale industries here.Chengannur Central Hatchery is perhaps the biggest poultry hatchery in Asia. 

• Chandiroor

Another destination ideal for commercial real estate investment in Alappuzha is Chandiroor. The place is nestled amidst Eramalloor and Aroor on National Highway 47. The industrial set-up is based on seafood processing. Other means of livelihood include shrimp farming, coir products manufacture and fish farming or pisciculture. 

• Cherthala

Cherthala is regarded as a satellite town and industrial centre of Alappuzha. The place is located on National Highway 66 and houses all resources and amenities that facilitate the growth of industries here. As per the census report of 2011, the population in Cherthala Municipality is 45,827. Even the place has many educational organisations. Cherthala is a popular tourist spot that has resulted in the development of the hospitality industry.

Things to Consider Before Investing in a Commercial Property in Alappuzha

While investing in commercial real estate investments, taking the following parameters into account 

• RERA Authentication

Ensure the property in which you are investing is registered under RERA. Under the provisions of the RERA Act, promoters have to provide necessary details regarding the projects and attach relevant documents which will enable investors to make an apprised decision while investing in a commercial property. It will also help investors escape legal disputes.

• Return on Investment

One of the most significant reasons why one invests in commercial real estate is to get an attractive ROI (Return on Investment) and long-term appreciation.  Hence, one must invest in a property that has the potential to fetch you the profit that you are looking for. Knowing the return on investment will enable you to become an informed investor.  Go for estimating expenses, costs and rental earnings to determine the profit you can make from it.

• Market Research

You must spend turnaround time analysing the market standards and prevailing economic trends before investing in a commercial property. Factors that affect the market like existing and anticipated rate hikes, unemployment rates etc., must be studied in advance. In addition, it is essential to have knowledge of recent sale prices, tenant rates etc. Besides checking these factors, analyse the probable future outlook of the chosen property.

Stamp Duty in Alappuzha

The table below displays the stamp duty rates that will be levied on you while making a commercial real estate investment in Alappuzha, Kerala.

Registration Charge in Alappuzha

Let’s look at the registration charge that is levied besides stamp duty. 

Alappuzha Commercial Real Estate Sector- What’s the Forecast?

Alappuzha, known for backwater tourism and agricultural and coir industries will undergo several changes with the emergence of new manufacturing units and IT parks.

The recent advancements have led to the robust development of the industrial scene in the city. With the implementation of the Samrambhaka Varsham project, the industries department in Alappuzha has successfully fetched investments of ₹ 444.42 crores which have led to the generation of 18,437 jobs. Furthermore, 8710 ventures have been set-out. 

As a part of the Samrambhaka Varsham project, the government intends to set up around 1 lakh MSMEs (Micro, Small and Medium Enterprises) across Kerala and 9666 Micro, Small and Medium Enterprises in Alappuzha by 2023. To date, Alappuzha is the only district that has been able to meet 90% of the target. As of now, out of the total businesses that have opened, 46% have been done in the trade sector, 35% in the service sector and 19% in the manufacturing sector. 

Improvements will be done even in the already developed transportation system in Alappuzha. For instance, as part of the coastal hill tourism project, State Highway 11 will be upgraded to a National Highway. It will help to link Alappuzha with Kodaikanal. 

Commercial Real Estate Vs Other Asset Classes

Go through the sections to gain an idea regarding the particularities of different asset classes. 

• Commercial Real Estate vs Residential Real Estate

Commercial Real Estate will help you reap the advantages of higher returns. In addition, commercial properties are occupied by more responsible and reliable tenants (like an organisation or a business entity) who will comply with the rules. On the contrary, in residential real estate, you will not only earn comparatively lower returns but will have to bear high maintenance cost.

• Commercial Real Estate vs Gold

Gold has always been used as a cushion to protect against future inflation. Further, it can also be liquidated easily. However, considering market volatility levels, commercial real estate investment is far more stable than gold and has been always linked to long-term returns, more security and capital appreciation. In addition, it provides you with avenues for earnings through rental yields. 

• Commercial Real Estate Vs Stocks and Mutual Fund

Though with successful mutual funds and stock investments, you get to earn higher returns, the invested amount is susceptible to sudden market fluctuations. Moreover, if a company underperforms or fails in its pursuits, it will have an adverse impact on the holdings of investors. On the other hand, commercial real estate investments come with sizable lower risks and come with steady and assured monthly income. In addition, you can also benefit from lengthy lease tenure and trustworthy tenants. 

• Commercial Real Estate Vs Bonds

You can have passive earnings from commercial real estate and bonds. Bonds extend a predictable return over the entire life of an investment. Owing to its certainty, investors can gain an idea regarding their future income status. On the other hand, commercial real estate helps one earn higher returns. Additionally, the value of real estate tends to increase with time. 

If you are willing to earn a predictable return, invest in bonds. Explore our website for top-rated bonds and register for the same now!

The table below highlights the differences between different asset classes with respect to returns, risks, liquidity, ticket size and volatility.

Steps to Invest in Commercial Real Estate in Alappuzha

Mentioned below is the step-by-step guidance on how to invest in commercial real estate in Alappuzha

Step 1: Make a note of financial liabilities and set a budget.

Step 2: Start with property research. In this regard conduct both on and off-site market research.

Step 3: To make an informed decision, reach out to a real estate consultant who will guide on the market standards and future infrastructural development surrounding the property location. 

Step 4: Finalise a property after checking whether it is RERA-approved.  

Step 5: Keep all the documents in order. Proceed to complete the stamp duty and registration charge payments. Clear payments for service charges as well if you have taken assistance from real estate agents or consultants.

Step 6: To secure your property from unanticipated scenarios, opt for an insurance plan. 

Final Word

Alappuzha has evolved as an ideal commercial real estate investment site. The strong industrial base not only adds to the economy but also strengthens the infrastructural base and expands employment opportunities. However, to make the investment rewarding, you must have a deep understanding of the market standards, property location, investment guidelines and more. 

Frequently Asked Questions

1. What are some of the important industries in Alappuzha?

Ans. Alappuzha is home to several types of industries. Some of the notable ones are Evershine Chemical industries, Rainbow Rubber MAT Industries, Western Chemicals Industries, Atlantic Care Chemicals and more.

2. What are the main benefits of RERA?

Ans. Here are the following benefits that investors, builders, promoters, homebuyers and other stakeholders can reap with RERA.

• Under the provisions of RERA, builders are required to disclose all necessary information about a project on the RERA official website. 
• According to RERA rules, investors have to make payments during property transactions depending on the property’s carpet area and not for the super built-up areas like stairs, lifts etc.

3. Which is the nearest airport to Alappuzha?

The nearest airport to Alappuzha is Cochin International Airport located at a distance of 78 km. Another airport to the South is Thiruvananthapuram International Airport which is 159 km away from Alappuzha.