Guide for Shivaji Nagar Commercial Real Estate Investment
Shivaji Nagar, earlier known as Blackpally, is one of the busiest commercial localities in Bengaluru. It is famous among the locals for shopping and has numerous clothing shops, meat shops, street food stalls and more. Moreover, Shivaji Nagar is at the city’s heart.
Therefore, this locality is proliferating. Some other reasons for the popularity of this locality are its proximity to schools, colleges, hospitals, and the market. Furthermore, Shivaji Nagar is in Bengaluru. Bengaluru is Karnataka’s most prosperous city , contributing to 36.9% of the state’s GSDP (Gross State Domestic Product).
It is easy to commute through the locality because it is well-connected via buses, autos, and metro stations. Therefore, a business property in Shivaji Nagar is ideal for anybody searching for r high-end real estate in Bengaluru.
Let us find out how buying a commercial property in Shivaji Nagar will be profitable for investors interested in investing in real estate.
Top Reasons to Invest in Shivaji Nagar
Below are a few reasons why investing in commercial real estate in Shivaji Nagar is a good idea –
- Proximity to Hospitals
Locals and outsiders frequent this place because it houses two of the biggest hospitals in Bangalore. The first hospital is the Bowring and Lady Curzon Hospital, and the second is H B S Hospital.
Many people come here regularly to get themselves treated in such hospitals. It increases the demand for hotels, restaurants, food stalls and shops and medicine shops in the Shivaji Nagar area. If you invest in a commercial space in this area, you can easily give your space on rent to such businesses and generate substantial monthly income.
- Tourist Spots
Shivaji Nagar is in central Bangalore and is near popular tourist places like Choti Charminar Ahle Hadees Masjid and Cubbon Park. Tourists visiting the city will look for a place to stay in a central location near markets and tourist places.
As a result, having a commercial space here will allow you to rent them to various businesses like hotels, guest houses, food shops, grocery stores, etc.
- Shopping Centre
As we have already mentioned, Shivaji Nagar is known for its broad market, which draws massive footfall daily. Other than small shops and stalls for trinket shopping, a few large malls are also situated here. Two of the most famous malls in Shivaji Nagar are the Palazzo Retail Mall and Palace Mall. The Stephen Square Market also houses many shops and food stores.
A 240 sq ft plot of commercial space costs roughly ₹40 lakh in this area. If you put such property on rent, you can make ₹18,000 from rental income monthly.
Shivaji Nagar has good access to highways and metro stations. This area is close to two major metro stations in Bengaluru; the Shivaji Nagar Metro Station and Cubbon Park Metro Station. Well-connected localities tend to draw in more businesses, so you can try investing in commercial real estate in Shivaji Nagar.
Commercial Real Estate Investment Opportunities in Shivaji Nagar
There are a lot of tech parks and shopping malls where you can buy a commercial space like a shop or office space and then put it on rent to generate monthly passive income. Below are a few examples of such places –
- Central Street
Central Street is a major commercial street in Shivaji Nagar. It is known for its busy restaurants and cafes. Some major establishments on Central Street in Shivaji Nagar include the Hard Rock Café, Hoppipola, On the Edge, Hypnos, Empire Restaurant etc.
You can consider investing in a commercial place that can quickly turn into a restaurant, pub, or café on Central Street.
- Safina Plaza
Safina Plaza is a famous shopping centre situated in Shivaji Nagar. People will easily find lots of flea markets and exhibitions here. Even though many new malls have opened in Bangalore, Safina Plaza is still quite famous as a shopping location among locals.
For a 60 sq ft commercial space in Safina Plaza, the rent will be around ₹25,000 and tenants will also have to pay a deposit of ₹2.5 Lakh. Therefore, you can generate considerable passive income by investing in a commercial space in Safina Plaza.
- Bangalore Cantonment
It is the location of the well-known Bangalore Cantonment Railway Station. As a result, there is a huge demand for business establishments like hotels, motels, lodges, and eateries around this place.
Having a commercial property to rent here will be very profitable. Moreover, business owners will be keen to open their businesses here due to the massive number of people visiting this locality.
- MG Road
MG Road, or Mahatma Gandhi Road, is the city’s commercial and recreational activities hub. This place is very close to Shivaji Nagar, and people often come here to shop on the weekends. One can easily find saree, salwar and other shops selling garments and clothing here.
Here you can find numerous restaurants and pubs . A 798.7 sq ft commercial space will cost around ₹2 crore. Furthermore, owners can put such properties on rent for ₹25,000 per month. Commercial properties like these tend to have an ROI of 3.85%.
- Pulikeshi Nagar
Pulikeshi Nagar, commonly known as Frazer (or Fraser) Town, is a prominent suburb near Shivaji Nagar. It has excellent connectivity with rail and road networks. You can find numerous shopping malls and colleges here.
Rent for a 5,000 sq ft shop can go up to ₹20,000 per month. Therefore, the price of such properties tends to be ₹10 crore. Furthermore, commercial properties in Frazer Town have great appreciation value.
Things to Consider before Buying a Commercial Property in Shivaji Nagar
Here we have listed down a few factors that you should take into consideration if you are planning to purchase a commercial property in Shivaji Nagar –
- Location and Connectivity
As an individual, if you are interested in investing in commercial real estate in Shivaji Nagar, you must check if the property’s location is thoroughly well-connected. Shivaji Nagar is a locality at the heart of the city of Bangalore. It connects well via roads, railways, and metro stations.
Properties in this area are bound to bring massive business to the owners. Therefore, it is a good idea to stick to commercial spaces near the main roads rather than those in the interior parts of Shivaji Nagar.
- Lease Structure
A lease is a formal document both the owner and the tenant sign. This legal agreement defines the relationship between a tenant and the property owner. As an owner, you need to create the lease document in such a way that you get maximum benefits out of the renting situation.
There are many times, especially in commercial space renting, when the occupant of the plot often refuses to vacate the space. Therefore, you need to create a foolproof lease agreement as an owner.
- Builder Inspection through RERA
If you want to invest in a property still under construction, it is essential to check the authenticity of the builder or real estate developer. You can check their registration through the RERA portal.
It would help you as the fraudulent real estate developers may take your money and stop construction mid-way. So, to protect yourself from getting duped, you must do thorough research on the builder or the real estate developer.
Pay special attention to the property’s infrastructure if you are investing in commercial real estate to sell it after a few years. New buyers will look for modern amenities if you sell the property. As a result, older properties will have less demand than new ones.
Stamp Duty in Shivaji Nagar
Since Shivaji Nagar is a locality in Bangalore, its stamp duty is the same as Bangalore’s stamp duty. The stamp which you will have to pay for a commercial property in Shivaji Nagar is as follows:
|Property value||Stamp duty|
|Less than ₹20 lakhs||2%|
|Between ₹20 lakhs and ₹45 lakhs||3% plus surcharge and cess (surcharge applies on properties only above ₹35 lakhs)|
|More than ₹45 lakhs||5% plus surcharge and cess|
Furthermore, you also need to pay a surcharge and cess if you buy a commercial space in Shivaji Nagar. These surcharges are levied on the stamp duty and not the cost of the property.
Registration Charges in Shivaji Nagar
Commercial property buyers must also pay a certain amount to the State Government through registration fees. Below is a tabular illustration of all the registration charges a buyer needs to pay if they purchase a commercial property in Shivaji Nagar –
|Property value||Registration charges|
|Less than ₹20 lakhs||1% of the property value|
|Between ₹20 lakhs and ₹45 lakhs||1% of the property value|
|More than ₹45 lakhs||1% of the property value|
Shivaji Nagar Commercial Real Estate Sector Outlook
Shivaji Nagar is a prominent locality in Bangalore where many people regularly visit to shop, eat, and enjoy their time. This place sees significant footfall during weekends. If you invest in commercial property, you can generate stable passive revenues for yourself every month.
There is a huge demand for businesses like clothing shops, jewellery stores, cafes, restaurants, and food stalls at Shivaji Nagar.
In Shivaji Nagar you can rent a 2,100 sq ft main road-facing commercial space with private bathrooms at ₹3 lakh per month. Such spaces will suit businesses like boutiques, clinics, bakeries, and cafes. Moreover, commercial spaces in Shivaji Nagar have an average rent appreciation rate of 5%.
Commercial Real Estate vs Other Asset Classes
If you are looking for reasons to invest in commercial real estate, given below is a comparison of commercial real estate with all the other asset classes –
Commercial Real Estate vs Residential Real Estate
Although an investor will be investing almost the price for both commercial and residential real estate, the kind of returns the investor will receive will be very different. Investors will receive a lower monthly rent in residential real estate than in commercial real estate.
The appreciation price for premium and luxury residential real estate is much less than for commercial real estate. Furthermore, you will not have to spend money on beautifying the space, like adding cabinets, etc., on commercial real estate properties. On the other hand, residential real estate owners must spend on this before renting out the place.
Commercial Real Estate vs Gold
The rate of return from a commercial real estate property from a prime place in a metropolitan city will be much higher than the rate of return from gold. But if you are looking for a stable asset class to invest in, then gold is far more steady than commercial real estate. Moreover, gold has more liquidity as compared to real estate investments.
Commercial Real Estate vs Bonds
Historically it has been observed that bonds are more stable as compared to commercial real estate. Moreover, bonds (AAA-rated) have low credit risk, unlike commercial real estate investments. If you have a high-risk appetite, you should consider investing in commercial real estate because it will garner more returns than bonds.
Commercial Real Estate vs Equity Mutual Funds and Stocks
Equity Mutual funds tend to be more volatile than commercial real estate investments, so they do not give stable returns compared to commercial real estate. Furthermore, the share market fluctuates, making it difficult for investors to plan.
Below is a table which will explain the difference between the various asset classes in short:
|Parameters||Commercial Real Estate||Stocks & Equity Mutual Funds||Gold||Residential Real Estate||Bonds|
Furthermore, you can check out Wint Wealth if you plan to invest in bonds alongside other investment avenues. Here you can invest in bonds and diversify your investment portfolio without worrying about additional or hidden charges.
Steps to Invest in Commercial Real Estate
If you are interested in investing in commercial real estate, follow the steps given below:
Step 1: Choose and fix a budget for your commercial real estate investment.
Step 2: Conduct market research and look through various properties in and around Shivaji Nagar.
Step 3: Select 3-4 properties that are within your budget.
Step 4: Visit each property physically before you invest your money in the property.
Step 5: Select the property that best suits your investment goals and budget.
Step 6: Check all the official documents before purchasing the selected property. Here you can take the help of legal advisors.
Step 7: Pay the stamp duty and registration charges based on the rules of the state where you will be purchasing the property.
Step 8: Pay the brokers, agents and legal advisors who have helped you purchase the commercial property, if any.
Step 9: Purchase an insurance plan for the property to protect you and your family from unforeseen circumstances.
Shivaji Nagar is in the centre of Bengaluru, the largest city in South India and the country’s biggest IT hub. There are many shops, and with each passing day, more businesses are increasing here. These factors make it a highly sought-after location for commercial real estate. If you invest in commercial property here, you can feel assured about getting a high passive income.
Frequently Asked Questions (FAQs)
What are the property rates in Shivaji Nagar?
The starting price of real estate in Shivaji Nagar is ₹699 per square foot, whereas the average cost is ₹13,499 per sq ft.
What is YoY Growth in property rates in Shivaji Nagar?
To understand the YoY growth of Shivaji Nagar, we can do so with the help of the percentage of rise or fall in the price of properties sold in Shivaji Nagar. In the previous year, Shivaji Nagar witnessed a rise of 7% in property prices.
Is investing in commercial spaces like warehouses in Shivaji Nagar beneficial?
Warehouses, godowns and parking spaces are different types of commercial real estate. Investing in such properties in Shivaji Nagar can generate considerable profits because there are markets, malls and food shops. Shop owners will require a warehouse to store their goods and surplus.
What documents are necessary for a commercial property?
The following is a list of documents you need to ensure you have in possession after you purchase a commercial property:
Tax payment receipts