Guide for Ludhiana Commercial Real Estate Investment
Ludhiana, known as the industrial hub of Punjab, has come a long way from being a small village known as Meer Hota to now one of the important cities of Punjab. The city has been seeing a great upward trend in terms of the development of industrial areas, which is resulting in overall infrastructural development.
This city is mainly known for its textile and hosiery industry. It is also renowned for having the largest bicycle manufacturing hub in Asia.
As the city is growing and becoming more urbanised, many people have realised its potential and are setting up new industries. This has, in turn, resulted in both commercial as well as residential development in Ludhiana.
Going further in this blog, you will learn how investing in commercial real estate in Ludhiana can bring great benefits in future.
Reasons to Invest in Ludhiana Real Estate
The following are the top reasons why you may want to invest in commercial properties in Ludhiana:
- Connectivity to Nearby States
Ludhiana is well connected to other parts of Punjab’s state, making it a preferred option for real estate investors. Ludhiana Airport is situated just 5 km away from the main city near the GT Road.
Also, there are two National Highways which connect NH 1 (Delhi to Amritsar) at Doraha City and NH 95 (Ludhiana to Ferozpur) near Agriculture University Ludhiana. It is an important link between Delhi and Jammu & Kashmir.
The Ludhiana BRTS (Bus Rapid Transit System) has improved connectivity throughout the city by connecting major roads and highways such as Hambran, Rahon and Gill Roads. Also, the market value of properties is lower than in other prominent cities such as Amritsar and Chandigarh.
- Growth in Infrastructure
Following an upsurge in residential spaces, Ludhiana is experiencing a lot of commercial and infrastructural development. As a result, the State Government has undertaken a number of developmental projects. In newly developed areas like Chandigarh Road, water supply, drainage, and electricity have already been set up. Moreover, the Punjab Infrastructure Development Board (PIDB) has prepared rapid transport bus systems in the city.
Commercial Real Estate Investment Opportunities in Ludhiana
Investors looking for prime real estate in Ludhiana can consider the following places:
- Mall Road
The Mall Road stretches 1.2 km in Ludhiana city, and it is a prime location for commercial real estate. The nearest railway station, Ludhiana Junction, is under 1 km away. You can find everything from banks, ATMs and restaurants to educational institutions like Patiala Heart Institute in the immediate vicinity.
Commercial spaces in Mall Road start from ₹2,000 per sq ft.
- Shastri Nagar
Shastri Nagar is another location which is seeing growing demand for commercial properties. It is well-connected to other parts of the state via Ludhiana Junction Railway Station and Ludhiana Airport. You can find most facilities, such as multiplexes, shopping plazas, banks, and healthcare facilities, near this area.
Commercial properties in Shastri Nagar, Ludhiana, start from ₹1,799 per sq ft.
Things to Consider before Buying a Commercial Property in Ludhiana
Here are some things you might need to consider before investing in a commercial property in Ludhiana:
A well-connected neighbourhood adds extra value to your property. For example, Ludhiana has great connectivity via roads and national highways such as GT Road, which connects it to the Ludhiana Airport.
Another thing to consider before purchasing a commercial property is its infrastructure. The condition and availability of highways, water supply, electricity, sewage system, public transit, hospitals, etc., determine how much income you can make from a commercial property. Infrastructural developments also appreciate the price of your property.
- RERA Verification
All the developers, builders and realtors and their projects should be registered on the RERA portal of that respective state. You can cross-verify the details of the said property and its builder from the RERA Punjab portal when buying properties in Ludhiana.
Stamp Duty in Punjab
For completion of registration of the property purchased, you must pay stamp duty and registration charges for the respective state. Here are the details regarding stamp duty charges in Ludhiana, Punjab.
|Type of Ownership||Stamp Duty|
|Joint Ownership (Male + Female)||6%|
|Joint Ownership (Male + Male)||7%|
|Joint Ownership (Female + Female)||6%|
Registration Charges in Punjab
In this section, you will learn about the applicable registration charges for commercial property in Ludhiana, Punjab:
|Type of Ownership||Registration Charges|
|Joint (Male + Female)||1%|
|Joint (Male + Male)||1%|
|Joint (Female + Female)||1%|
Ludhiana Commercial Real Estate Sector: What’s the Forecast?
As per reports, Ludhiana has been seeing massive industrial growth for the past few years. In the Progressive Punjab Investors’ Summit-2021, it has accumulated approximately ₹7,680 crore from local as well as NRI investors.
As per reports, this development plan will create around 2000 well-paid job opportunities over the years. Ludhiana, being Punjab and North India’s second-largest city, is witnessing massive cash flow from the manufacturing industries. With this high amount of disposable income and NRI investment, its commercial estate industry will likely have a bright future.
Commercial Real Estate vs Other Asset Classes
In this section, you will see how the returns generated from different asset classes compare with commercial real estate investments:
- Commercial Real Estate vs Stocks and Mutual Funds
Investments in mutual funds and stocks have the potential to earn higher returns, but it comes with high risks of losses. Commercial properties give more stable returns over time, which makes investment planning more straightforward.
- Commercial Real Estate vs Gold
Gold is a safer and more stable investment option than commercial properties. Additionally, gold offers higher liquidity than real estate. However, it offers fewer returns than commercial real estate.
- Commercial Real Estate vs Residential Real estate
When it comes to comparing residential and commercial properties, the latter has some advantages. Primarily, it offers more returns over time as rent tends to be higher for commercial spaces.
- Commercial Real Estate vs Bonds
Commercial real estate properties can generate a stable source of passive income, just like bonds. However, bonds have lower credit risk when compared to commercial real estate.
Here’s a tabular representation that compares the assets based on various parameters:
|Parameters||Commercial Real Estate||Stocks and Mutual Funds||Gold||Residential Real estate||Bonds|
If you want to invest in bonds with stable returns and low risk, you can explore more on Wint Wealth.
Steps to Invest in Commercial Real Estate in Ludhiana
You should follow the given steps to invest in commercial properties in Ludhiana:
Step 1: Decide your budget and narrow down some properties through adequate market research.
Step 2: Go on a site visit to check the profitability and other features of that property. You can take the help of real estate agents if required.
Step 3: Settle your decision on a property and check if the seller has the official documents.
Step 4: Pay applicable stamp duty and registration charges and, if possible, add insurance for additional protection.
When it comes to investing in the real estate industry, Ludhiana has the potential to earn significant returns. Looking at its current stature, it is currently home to multiple small and medium enterprises. In addition, this city is known for its electric goods, textile brands, and industrial fasteners. Its industrial growth has further aided in the growth of the real estate sector.
Frequently Asked Questions
What is considered a good return on investment on commercial property?
A good return on investment on commercial property can be anywhere between 5% and 12%. However, it depends on a lot of other prospects, such as locality and infrastructure, which affect the market value of a property.
What are some drawbacks of investing in commercial real estate?
Investing in commercial estate requires more time spent as well as higher capital. It also involves credit risk as it involves tenants.
What is the cost of living in Ludhiana?
As per Numbeo, a family of four requires around ₹88,162.81, and an individual requires ₹25,702.55 monthly to live in Ludhiana without rent. Also, it is 0.44% less costly to live in Ludhiana than in Kolkata.
Is Ludhiana a metro city?
Ludhiana was the first to become the metro city of Punjab in 1991 and was later joined by Amritsar in 2001.