Commercial Real Estate Investment in Malegaon￼
Malegaon is the second-largest city in the Nashik district in Maharashtra. This city boasts a diverse population of 4,81,228, with 70% of the residents being Muslims. The residents of various religious backgrounds have upheld communal harmony in an amazing way and contributed to the city’s development.
Malegaon is a Tier II city located 110 km from Nashik on the Bombay-Agra highway, which makes this city an important transit hub. Furthermore, it has great potential to become Maharashtra’s next big industrial hub.
This city is well-connected with other industrial hubs in Maharashtra, which is a big business-friendly state. Malegaon has one of the country’s largest cloth weaving and PVC manufacturing sectors. In recent years, the government has also been successful in attracting some new-age BPO and IT companies to Malegaon.
Apart from that, Malegaon is 57 km away from Nanded, which houses several tourist attractions. It is especially famous for the Malegaon Yatra, a fair held in honour of Lord Khandoba.
All of these factors contribute to the rise of demand for commercial space in this city. If you are interested in commercial real estate investment in Malegaon, read the following sections.
Top Reasons to Invest in Malegaon Real Estate
Given below are the reasons you should consider investing in commercial real estate in Malegaon:
- A Massive Textile Industry
If we look at the history of Malegaon, we will find that it was the centre of the handloom industry for many years. Today, there are around 1.1 lakh power looms in this city employing over 80,000 people. The weaving industry of Malegaon is involved in the production of cotton fabrics, dyed cloth, printed saris, synthetic fabrics, etc.
You can consider making commercial real estate investments in the textile industry, as it can be a great success.
- A Growing Plastic industry
The plastic industry in Malegaon generates direct and indirect employment for around 1,20,000 people and occupies an important role in the Indian economy. The plastic industries in Malegaon are involved in reprocessing plastic pipes and manufacturing semi-finished plastic raw materials. A commercial real estate investment in warehouses and industrial units in this city can generate high returns.
- Business from Tourism
Some of the most important tourist destinations in this northwestern Maharashtrian city include Malegaon Fort, Urdu Library, Kaku Bai Ka Bag and Gargoti Mineral Museum.
Jamiatus Swalehaat is an important educational institution which provides Islamic education to women. The popularity of this institution is such that it attracts women from all over the world for higher studies. You can consider investing in tourist accommodations and good restaurants if you wish to contribute to tourism development in Malegaon.
Commercial Real Estate Investment Opportunities in Malegaon
You can consider investing in commercial real estate in the following areas in Malegaon:
- Nagaon Manmad Road
You can consider investing in commercial properties on Nagaon Manmad Road in Malegaon. Prices start from ₹741 per square foot, which is quite reasonable. This locality is reachable from Malegaon and via the Manmad Junction Railway Station. There are a few high schools and colleges near this locality.
- Malde Shivar
You can also consider making commercial real estate investments in Malde Shivar, where prices start from ₹4,235 per square foot. Malde Shivar is located close to National Highway 3 and has good connectivity with other parts of the city.
Things to Consider before Buying a Commercial Property in Malegaon
Detailed below are the important things to consider before investing in commercial real estate in Malegaon:
- Builder’s Credibility
It is essential to carry out a thorough background check of a property’s builder before investing in an under-construction project. You must find out how many commercial real estate projects the builder has completed. Moreover, do not forget to check whether any legal cases are pending against them in court.
- Check Authenticity through RERA
The Real Estate (Regulation and Development) Act 2016 was established for the regulation and promotion of real estate transactions in India. The Act sought to protect investors’ interests and provide information in a transparent manner.
Every builder in India must register themselves and their property’s details with the Real Estate Regulatory Authority (RERA). Before investing in any commercial property, visit the Maharashtra RERA portal to check the authenticity of the commercial property.
- Availability of Amenities
Before investing in any commercial property, analyse whether the locality has easy access to necessary amenities. Check whether electricity and water are available in the area and how far it is from the nearest airport and railway station.
Stamp Duty in Malegaon
The stamp duty rates of Malegaon are given in the table below:
|Property Owner||Stamp Duty Rates|
|Male||7% (including 5% stamp duty, 1% Metro Cess and 1% Local Body Tax)|
|Female||6% (including 5% stamp duty, 1% Metro Cess and 1% Local Body Tax)|
Registration Charges in Malegaon
Here are the registration charges for properties in Malegaon:
|Property Value||Registration Charges|
|For residential properties worth less than ₹30 lakh||1% of the property value as per the agreement|
Malegaon Commercial Real Estate Sector: What’s the Forecast?
Commercial real estate investments have a bright future in the city of Malegaon because this Tier II city is developing rapidly. Over the past few years, residents of Malegaon have witnessed a diversification of the various industrial sectors.
The Maharashtra Industrial Development Corporation (MIDC) plans to develop a plastic recycling park across 200 acres of land in Malegaon. It also plans to develop an industrial estate at Ajnag, located near Malegaon. The Maharashtra State Agricultural Development Corporation (MSA) has granted 852.514 acres of land to MIDC for this purpose.
Apart from heavy industrial development, many small businesses in Malegaon have high growth potential. Keeping all of these factors in mind, it can be easily said that commercial real estate investment in Malegaon will yield fruitful returns.
Commercial Real Estate vs Other Asset Classes
Now, let us compare commercial real estate investment with other asset classes:
Commercial Real Estate vs Mutual Funds and Stocks
Commercial real estate is not very volatile, unlike mutual funds and stocks. Moreover, mutual fund returns depend on market movements which makes it difficult for investors to get a proper idea about how much they will be able to earn. However, they offer higher potential returns than real estate.
Commercial Real Estate vs Gold
Commercial real estate investments have the potential to yield stable and moderate returns, but gold is a safer investment option. A significant feature of investment in gold is that it offers the benefit of high liquidity, unlike commercial properties.
Commercial Real Estate vs Residential Real Estate
Commercial real estate generates higher returns compared to residential real estate though it carries more risks and higher investment costs. Moreover, commercial properties hold the potential for better rental income. In a city like Malegaon, commercial real estate investments will generate good returns in the future.
Commercial Real Estate vs Bonds
Both commercial real estate and bonds are good sources of passive income. But, compared to bonds, commercial real estate is less liquid and contains high credit risk.
Here is a tabular representation of the comparisons between commercial real estate investment in Malegaon with other asset classes:
|Parameters||Residential Real Estate||Stocks & Mutual Funds||Bonds||Gold||Commercial Real Estate|
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Steps to Invest in Commercial Real Estate in Malegaon
Given below are the steps to start investing in commercial real estate in Malegaon:
Step 1: Formulate a budget and research the potential areas in Malegaon which would see a price increase in the future.
Step 2: Shortlist a few sites that match your budget and conduct a ground survey by visiting each place.
Step 3: Select a commercial property aligned with your investment goals and budget and check whether all the important documents are in place while the property is getting transferred.
Step 4: Pay the seller and collect all the property documents to complete the transaction.
Step 5: Make sure you complete stamp duty and registration formalities before the property is transferred to your name.
Step 6: Remember to pay the brokers or real estate consultants if you have taken their help. You can also consider purchasing an appropriate insurance policy to safeguard your investment.
You can consider making commercial real estate investments in Malegaon, a Tier II city located in the northwestern part of Maharashtra. The textile and plastic industry and the tourism sector are major contributors to this city’s economy. As the state government gets started with its plans to improve the city’s infrastructure, commercial properties will make good and stable returns for investors.
Frequently Asked Questions
What are the things I need to check before signing an agreement?
Before signing an agreement, check whether the following details are mentioned or not—the base price, carpet area, facilities, additional taxes like PLC, payment mode and applicable taxes.
What are the ways of buyer protection when there is a delay in the project?
The National Commission has stated that buyers/investors are entitled to receive a refund of the amount with interest and appropriate compensation if there is a project completion delay.
Which areas are ideal for commercial real estate investment in Malegaon?
You can consider investing in Nagaon Manmand road and Malde Shivar. You can also consider investing in areas around Ajnag, which is set to develop as a major industrial unit in Malegaon.
How to compare real estate properties?
If you wish to invest in commercial properties, you can use online portals to compare various commercial projects across the country. You can check prices based on location, property designs, amenities provided, features and the builder’s reputation.