Guide for Gwalior Commercial Real Estate Investment
Gwalior is located in the Central Indian state of Madhya Pradesh and holds historical significance. It is a Tier II city selected by the Indian Government for the Smart City Project. With this, the authorities want to transform the city in terms of health, education and economics.
The Smart City Mission is developing Gwalior into a “Culture and Heritage” city. It involves making improvements to old historical buildings. Moreover, a common marketplace has been created in the city for the unorganised sector, with 31 services via a round-the-clock control room and vendor’s room.
Agriculture is an important economic growth driver of Gwalior. Food grain, vegetables and fruit production industry, medicinal and aromatic crop industry, and animal husbandry are some economic activities that benefit businesses in Gwalior.
Steel fabrication, paper production, wood production and processing are other vital industries in Gwalior. To initiate the developments as per the Smart Cities Mission program, the Government of India has transferred ₹196 crore to the concerned authorities.
With the improvement in infrastructural development, commercial real estate investment has bright prospects in Gwalior.
Top Reasons to Invest in Gwalior’s Commercial Real Estate
Given below are some good reasons to invest in commercial real estate in Gwalior:
Gwalior houses many reputed educational institutions such as ABV-IIITM (Atal Bihari Vajpayee – Indian Institute of Information Technology and Management), Raja Mansingh Tomar Music & Arts University, JC Mills School and The Scindia School. As a result, commercial ventures like coaching centres, students’ hostels and food centres are quite popular.
Gwalior is also a major tourist attraction as it houses some of the famous wildlife sanctuaries of India. For example, Kuno Wildlife Sanctuary, also known as Palpur-Kuno Wildlife Sanctuary and Madhav National Park, are major tourist attractions.
Sonagiri, Padavali, Mitavali, Datia, Chambal River Sanctuary and Kaner Jheel are some popular destinations in or nearby Gwalior. Therefore, consider investing in tourist accommodations and restaurants to earn a stable income.
The residents of Gwalior are witnessing rapid industrial developments. As it’s a Tier II city which has also been incorporated under the Smart Cities Mission program, employment opportunities are set to increase in Gwalior. It will likely result in an increasing number of people migrating to Gwalior from the neighbouring towns and cities in Madhya Pradesh, improving the demand for real estate here.
Commercial Real Estate Investment Opportunities in Gwalior
You can consider investing in commercial properties in the following areas in Gwalior:
You can consider investing in commercial spaces in Padav, Gwalior. The place is well-connected with other areas of the city, and prices here start from ₹7,333 per square foot.
Consider investing in commercial areas in Purani Chhawani, another area well-connected with other parts of the city. There are many commercial lands for sale in this area, and you can consider investing in students’ dwellings and tourist accommodations. Prices start from ₹2,000 per square foot.
Things to Consider before Investing in a Commercial Property in Gwalior
Listed below are the critical factors to consider before investing in commercial real estate in Gwalior:
Before investing in a commercial property in Gwalior, you should check its authenticity on the Madhya Pradesh RERA portal. Every builder and developer in India must register themselves and the details of their projects on the RERA portals of their state, and failure to do so will invite legal consequences.
Checking the status of the builder’s past projects is important to understand their credibility. You should also check whether the builder has legal cases pending against them or if they are involved in property disputes.
You should also check whether the location is well-connected with other parts of the city. Also, assess that the property has all the necessary amenities, including lifts, parking spaces, well-maintained staircases and proper drainage. These features will further increase a property’s prospects in the long run.
Stamp Duty in Gwalior
The table below provides the stamp duty rates in Gwalior:
|Type of Owner||Stamp Duty Rates|
|Joint (Male + Male)||7.5%|
|Joint (Male + Female)||7.5%|
|Joint (Female + Female)||7.5%|
Registration Charges in Gwalior
The registration charges are as follows:
|Type of Owner||Stamp Duty Rates|
|Male||3% of the property value|
|Female||3% of the property value|
|Joint (Male + Male)||3% of the property value|
|Joint (Male + Female)||3% of the property value|
|Joint (Female + Female)||3% of the property value|
Gwalior’s Commercial Real Estate Outlook
Commercial real estate investments have bright prospects in Gwalior. The growth of Tier II cities like Gwalior contributed to the economic resilience of India during the pandemic. Now that the worst is over, financial experts have predicted that the real estate sector will flourish.
With the ‘work-from-home’ becoming widespread, people are giving up their accommodation in the metro cities and returning home. Moreover, as lands are available at much lower prices in Tier II cities, many established companies are choosing to increase their presence in these places.
Developing infrastructure and connectivity and affordable cost of living are major contributors to the fact that Gwalior is gradually emerging as a significant growth driver of Madhya Pradesh.
Commercial Real Estate vs Other Asset Classes
Let us compare commercial real estate with other asset classes:
Commercial Real Estate vs Residential Real Estate
Commercial real estate holds the potential to generate higher returns than residential real estate as they generate better rental income. Moreover, the demand for commercial spaces, especially in the premium category, is always higher though they cost more.
Commercial Real Estate vs Bonds
Both bonds and commercial real estate are stable sources of passive income. But compared to commercial properties, bonds (AAA-rated) have lower credit risk because returns from commercial real estate investments depend on tenants making timely payments.
Another crucial point of difference is that bonds are much more liquid than commercial properties, where the owner cannot sell off their property in the absence of suitable buyers.
Commercial Real Estate vs Equity Mutual Funds and Stocks
Although both these asset classes have the potential to generate good returns, commercial properties are less volatile. Equity mutual funds and stocks are subject to market fluctuations. Compared to them, commercial properties do not carry such high volatility and generate more stable returns.
Commercial Real Estate vs Gold
Though commercial real estate generates higher returns than gold, the latter is considered a safer and more secure investment and has the advantage of higher liquidity. Moreover, selling off gold is much easier than finding tenants and selling off commercial real estate.
Here is a tabular representation of the differences in returns generated by the various asset classes:
|Parameters||Commercial Real Estate||Gold||Stocks & Equity Mutual Funds||Bonds||Residential Real Estate|
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Steps to Invest in Commercial Properties in Gwalior
Given below are the steps to invest in a commercial property in Gwalior:
Step 1: Decide on your budget and research the sites that promise price increases in the future.
Step 2: Shortlist a few sites based on your research and visit the sites to assess the ground situation in detail.
Step 3: Consult real estate experts, if necessary, before purchasing a property. While the transaction takes place, remember to check all the essential documents, such as the title deed, property extraction certificate, encumbrance certificate etc.
Step 4: To transfer the property in your name, complete the formalities associated with stamp duty and registration charges.
Step 5: Pay the real estate consultants and advocates if you have availed their services.
Gwalior, a Tier II city, is an important tourist destination in Madhya Pradesh due to its many historical and cultural sites. In addition, it is a well-connected city with major industrial areas and rapidly growing infrastructure. Moreover, the city is experiencing a high degree of urbanisation as the “Counter Magnet” project increases its appeal for real estate investment. Hence, commercial real estate investments here are likely to provide considerable gains.
Frequently Asked Questions (FAQs)
How are registration charges calculated in Madhya Pradesh?
The market value of the property or the agreed value, whichever is larger, is used to determine the registration fees in Madhya Pradesh. Therefore, 3% is the registration charge in Madhya Pradesh.
When were stamp duty rates revised in Madhya Pradesh?
Stamp duty rates were revised in 2020 in Madhya Pradesh, and were decreased by 2.5% amid the pandemic. However, now they are restored to the original rate of 7.5%.
What type of commercial properties can I invest in Gwalior?
You can invest in tourist accommodations, food parks and industrial units in Gwalior. You can also consider investing in office spaces.
Which are the most viable areas for commercial real estate investments in Gwalior?
Padav and Purani Chhawani are some areas where you can consider investing in commercial real estate.