Guide for Lucknow Commercial Real Estate Investment
Lucknow is the capital and the second-largest city of Uttar Pradesh. With a population of approximately 280 lakh, it has been an important center of governance, administration, finance, education, etc., for a long time. Moreover, with developing infrastructure, this city has many major industries, generating numerous employment opportunities. Moreover, as an important city in UP, the connectivity here is also remarkable, providing easy access to many different locations.
The demand for commercial real estate in this location is increasing due to all these facilities and the developing infrastructure.
Let us know more about the real estate opportunities in Lucknow!
Top Reasons to Invest in Commercial Real Estate in Lucknow
The reasons to invest in the commercial real estate of Lucknow are as follows:
This city provides excellent accessibility to many other crucial parts of the state through roads and highways like NH25, NH28, and NH56. It also has railways and metro rail network facilities, enabling convenient local travel in a cost-efficient and faster way. Moreover, the airway facility expands accessibility to many other parts of the world.
The Indian Ministry of Urban Development recently published a Fast Track Smart Cities list. Lucknow has made its position on the list for rapid development and infrastructural growth. The current construction expansion schemes like the Gomti River Front Project and the Lucknow Metro Rail Program are primary developments that are taking place in the city.
Investment Opportunities in Commercial Real Estate in Lucknow
The locations in Lucknow having the best opportunities for commercial real estate are:
One of the famous localities for commercial real estate in Lucknow, Indira Nagar is a developed and well-maintained place. Moreover, it enjoys great connectivity as it covers many vital roadways and is only 10 minutes from the nearest metro station.
It is also an ideal location for commercial buildings due to the property availability at comparatively lower prices. Moreover, this area is easily accessible by bus and auto, providing easy transportation to daily office goers.
Things to Keep in Mind Before Buying a Commercial Property in Lucknow
The primary things to keep in mind before buying a commercial real estate property in Lucknow are as follows:
Proper Market Research
Investing in commercial real estate involves higher risks and thus needs a substantial amount of research. However, proper knowledge of the market will save you from fraudulent activities.
The Real Estate Regulatory Authority (RERA) is a statutory body notified by the Real Estate (Regulation and Development) Act of 2016 to promote transparency between builders, real estate agents and buyers. Check the authenticity of the builder and their property by visiting the RERA website of Uttar Pradesh.
A lease is a legal contract between a commercial space owner and occupier to identify any risk involvement. It must be comprehended completely before assessing and analysing any investment.
Stamp Duty Rates in Lucknow, Uttar Pradesh
The stamp duty rates for commercial property sales in Lucknow are in the following table:
|Gender||Stamp Duty Rates|
|Joint (Male + Female)||7%|
|Joint (Male + Male)||7%|
|Joint (Female + Female)||7%|
Note: In some cases, women are offered a 1% reduction in stamp duty charges in Uttar Pradesh. This reduction is applicable only up to ₹10 lakhs out of the total transaction value of a property.
Registration Charges in Lucknow, Uttar Pradesh
The applicable registration charges in Lucknow are as follows:
|Male||1% of property value|
|Female||1% of property value (a rebate of Rs 10,000 available on the final amount payable)|
|Joint (Male + Female)||1% of property value (a rebate of Rs 10,000 available on the final amount payable)|
|Joint (Male + Male)||1% of property value|
|Joint (Female + Female)||1% of property value (a rebate of Rs 10,000 available on the final amount payable)|
It is very important to consider the rates of stamp duty and registration as they will be a part of your investment amount.
Lucknow’s Commercial Real Estate Sector Outlook
The main drivers of Lucknow’s real estate market boom are a significant change in consumer behaviour and the economy. Moreover, due to good governance, huge investments and rapid infrastructure growth, Lucknow’s position as a promising real estate sector has been reinforced in 2022.
The city is already filled with numerous opportunities adding to its economic growth. Moreover, the developers are optimistic about Lucknow becoming a real estate hub in Northern India over the next 5-10 years. The development of Lucknow’s Green Corridor project is also in full swing, with the state government churning out almost ₹4000 crore for the project. Once ready, this 28 km project will reduce travel time from one end of the city to another by 45 minutes.
Additionally, experts believe Lucknow is the epicentre of Uttar Pradesh’s attempt to build a more robust economy. It is possible to say as the city’s GDP already accounts for 3.85% of UP’s total GDP. Moreover, its great connectivity, social amenities, open areas and investment opportunities are creating more demand for commercial real estate.
Commercial Real Estate vs Other Asset Classes
The difference between commercial real estate and other asset classes is as follows:
Commercial Real Estate vs Gold
Gold prices fluctuate according to market sentiments, which is not the case with commercial real estate. However, due to its simple conversion into liquid money, gold offers superior liquidity.
Commercial Real Estate vs Residential Real estate
Commercial real estate has higher rental prospects than residential spaces. However, the latter needs more demand than commercial real estate, especially in the premium category.
Commercial Real Estate vs Stocks and Equity Mutual Funds
Commercial real estate offers assured returns with direct asset ownership for the long term. However, the stock market provides comparatively higher returns but witnesses significant fluctuation with higher risks.
Commercial Real Estate vs Bonds
Bonds have low credit risk when compared to commercial real estate. Additionally, commercial property investments are less liquid than bonds due to higher transaction costs resulting in a long time to find suitable property buyers.
A tabular representation to compare the assets based on returns, liquidity, risk, volatility and ticket size is as follows:
|Parameters||Commercial Real Estate||Gold||Residential Real Estate||Stocks & Equity Mutual Funds||Bonds|
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Steps to Invest in Commercial Real Estate in Lucknow
The steps to invest in commercial real estate in Lucknow are as follows:
Step 1: Do proper market research and calculate your budget.
Step 2: Shortlist a few affordable sites. You can also take the help of an agent to get the best deals.
Step 3: Go on a field tour and examine each site precisely.
Step 4: Finalise a suitable commercial property and prepare all the official documents like the sale deed, building plan, etc.
Step 5: Make the final payment and purchase the property.
Step 6: Complete stamp duty and registration charges formalities, as applicable.
Step 7: Lastly, consider purchasing an insurance policy for your new property to protect yourself financially in case the property incurs any damage.
The outlook of commercial real estate in Lucknow is quite promising due to its growing economy, infrastructure and better connectivity. Moreover, being the capital city of Uttar Pradesh, it is one of the ideal places to establish commercial real estate property. However, if you plan to invest here, conduct thorough market research or consult a real estate agent to be aware of any fraudulent activities.
Frequently Asked Questions (FAQs)
Which are the best places to invest in Lucknow?
The best localities to invest in commercial real estate in Lucknow should be the places in the vicinity of Lucknow IT Corridor. These locations are Indira Nagar, Shivaji Puram, Sultanpur Road, Faizabad Road, Gomti Nagar, Gomti Nagar Extension, Shaheed Path, etc.
Is Lucknow a developed city?
Lucknow is a developed city due to its rapidly growing connectivity and infrastructure. Moreover, it is one of the critical places to get further development by the Government in the form of Lucknow IT Corridor.
Is it possible to claim a refund on stamp duty and registration charges in Lucknow?
Yes, claiming a stamp duty refund within six months of payment is possible. However, it is possible only in case of excess payment, and the refunded amount will undergo a 10% deduction from the total stamp duty charges paid. However, there is no refund on registration charges.
What type of commercial property is most profitable?
Some of the most profitable commercial properties include office space, multifamily projects, student housing, mixed-use buildings and self-storage facilities. The reason is that these properties can earn the highest return on investments with the most tenants.