Guide for Machilipatnam Commercial Real Estate Investment
Machilipatnam, also known as Masulipatnam or Masulipatam, is a major commercial city within the Krishna district of Andhra Pradesh. It has a population of 169,892. The city has a high literacy rate of 82.43%, which indicates the availability of skilled labour and potential white-collar workers.
From the time the British East India Company made it one of its primary trading ports to the present day, the city continues to be a commercial hub in the country. It has many small-scale industries, which include a major handloom industry, fashion gold industry and fishing and boat-building industry.
Therefore, Machilipatnam is one of the best locations for commercial real estate investments. Continue reading to learn about the investment opportunities in the city.
Top Reasons to Invest in Machilipatnam Real Estate
Some of the significant reasons why you should invest in commercial real estate in Machilipatnam are given below:
Machilipatnam is well connected to the rest of the country by roadways and railways. Good transportation facilities are a major prerequisite for commercial investments in a city. Machilipatnam is well connected to other cities of the state by state-run bus services. It is close to NH 9 national highway, which connects this city to Vijayawada.
Furthermore, there are two railway stations in Machilipatnam, the Machilipatnam railway station and the Chikalapudi railway station. Railways connect it to major cities of the country like Vijayawada, Vishakhapatnam, Tirupati and Bangalore.
- Industries and Commerce
Masulipatnam has several industries and is a major commercial site of the state. Since a large part of the population here is engaged in agriculture, it is also home to allied agricultural industries.
Also present in the city are other industries like poultry, animal husbandry, aquaculture, Kalamkari cloth printing industry, leather industry and imitation jewellery industry.
Due to the presence of various industries, the city is a potential location for commercial real estate investments.
Commercial Real Estate Investment Opportunities in Machilipatnam
Here are some of the significant commercial areas of Machilipatnam where you can profitably invest in:
Chikalapudi is a prominent commercial locality of Machilipatnam. It has excellent transport facilities which connect it to other parts of the city as well as to other cities of Andhra Pradesh like Vijayawada and Hyderabad.
The place has all the necessary amenities. There are 21 hospitals and 10 healthcare centres near this locality. This area has also developed into a commercial centre of the city with four shopping plazas, two supermarket stores and two restaurants.
Challapalli is another prominent area of Machilipatnam. The transport facilities are excellent, with bus stops near prominent locations. It has banks and hospitals within a distance of 6 km.
The area is also developing commercially into another important business centre of the city. The place has markets within walking distance and two supermarkets. This place can bring high profits on investment due to its rapidly developing commercial prospects.
Things to Consider Before Investing in a Commercial Property in Machilipatnam
To choose a property that can bring you high returns, you must keep certain factors in mind. Given below are some of the factors which determine the value of a property:
- Location and Connectivity
Location plays a vital role in determining the future prospects of a property. Therefore, you must choose a property which is nearby basic infrastructure and amenities that are required for the place to be a business hub. This includes banks, hospitals, other businesses and industries.
Also, choose a location which has easy connectivity to other parts of the city and other cities of the state since it is a major commercial requirement.
- RERA Verification
The Real Estate Regulatory Authority (RERA) is a statutory body that was set up in each state under the Real Estate Regulatory Authority Act, 2016. This body is responsible for regulating and maintaining transparency and accountability in India’s real estate business.
Therefore, before considering a commercial property in Machilipatnam, visit the official Andhra Pradesh RERA website to verify the details of the property and its builder.
Stamp Duty in Machilipatnam, Andhra Pradesh
Here are the applicable stamp duty rates in Machilipatnam, Andhra Pradesh:
|Document Type||Stamp Duty Rates|
|Agreement of sale||5%|
|Agreement of sale-cum-GPA||6%|
|Lease deeds of more than 10 years but less than 20 years||0.60%|
Registration Charges in Machilipatnam, Andhra Pradesh
Apart from stamp duty, you also have to pay the registration charges to be the legal owner of the property. Here are the property registration charges applicable in Machilipatnam, Andhra Pradesh:
|Document Type||Registration Charges|
|Agreement of sale||₹2000|
|Development agreement||0.5% (capped at 20,000)|
|Agreement of sale-cum-GPA||₹2000|
|Lease deeds of more than 10 years but less than 20 years||0.1%|
Machilipatnam Real Estate Sector: What’s the Forecast?
Machilipatnam shows a promising future. The state and central governments are investing in its infrastructure to make it a prominent commercial hub in the country. The Andhra Pradesh government is working on developing and reconstructing the Machilipatnam port. Furthermore, the central government has also announced the construction of a railway line connecting Machilipatnam with Repalle (Bapatla district).
NITI Aayog is also pinning its hopes on developing the infrastructure of Machilipatnam to make it an important location for commercial investment. Also, the state government is planning to hold a Global Investors Summit in 2023 to attract global investments in the state. As a part of their growth plan, they intend to develop Machilipatnam as a major port city in the country.
Thus, it is quite evident that Machilipatnam is rapidly developing into a prime business hub of the country.
Commercial Real Estate vs Other Asset Classes
Like other asset classes, investing in commercial real estate has its pros and cons. Here are some of the advantages and disadvantages of investing in commercial real estate as compared to the other asset classes:
Commercial Real Estate vs Gold
Commercial real estate can be more profitable than gold investments due to its high return potential. However, the liquidity of gold is higher than commercial real estate investments.
Commercial Real Estate vs Residential Real Estate
Commercial real estate can give you much higher returns than residential real estate because the tenants are usually businesses and companies. Furthermore, the rental prospects of commercial properties are higher.
Commercial Real Estate vs Stocks and Mutual Funds
Stocks can get you higher returns in a short time when compared to commercial real estate. However, investments in commercial real estate are less risky than investing in stocks. Stocks are highly volatile investments as they fluctuate according to market conditions.
Commercial Real Estate vs Bonds
Both commercial real estate and bonds can fetch you a stable income. However, bonds have a lower credit risk than commercial real estate. Furthermore, bonds have higher liquidity than commercial properties.
Here is a table that compares the different asset classes based on returns, liquidity, risk, volatility and ticket size:
|Parameters||Commercial Real Estate||Stocks & Mutual Funds||Gold||Residential Real Estate||Bonds|
Steps to Invest in Commercial Real Estate in Machilipatnam
Here are the steps to invest in commercial properties:
Step 1: Prepare a budget for your real estate investment and come up with a list of locations as per their growth potential.
Step 2: After shortlisting a few properties, plan a field visit to each of them to assess them in terms of infrastructure, amenities, etc.
Step 3: Finalise a property as per your requirements. Prepare the necessary documents for the purchase, such as sale deed, encumbrance certificate, building plan, etc.
Step 4: Complete the payment process. Make sure to pay the required stamp duty and registration charges.
Machilipatnam is a significant commercial city in Andhra Pradesh, and it has enormous development potential. If you plan to invest in the commercial real estate of this city, there are high chances that you would get a substantial resale value and high rental prospects. However, do the requisite research before investing and consult a real estate agent if required.
Frequently Asked Questions
Q1. What is the purpose of property registration?
Ans. Registration of a property is a crucial part of buying a property. It is required to become the legal owner of the property. As a buyer, you are required to pay the applicable registration fee to the state government to transfer the ownership of the property to your name.
Q2. What is a sale deed?
Ans. A sale deed is a legal document through which the seller of a property or its builder transfers the ownership of the property to the new buyer. It is an important document that is required to purchase a property.
Q3. Is insuring a commercial property necessary?
Ans. It is always advisable to insure a commercial property. An insurance plan provides you financial coverage in case your property incurs any damages due to natural calamities, fire, or theft.
Q4. What are the different types of commercial properties?
Ans. The different types of commercial properties that you can invest in are warehouses, storage facilities, hotels, restaurants, retail spaces, etc.