Guide for Theni Commercial Real Estate Investment

9 min read • Published 5 November 2022
Written by Team Wint Wealth
Guide for Teni Commercial Real Estate Investment

Theni is a picturesque town situated in the valleys of the Western Ghats in Tamil Nadu. Around this town  are vast stretches of land with tea and cotton plantations. Other crops majorly grown in Theni are silk, coffee, cardamom, banana, pulses, groundnut, etc. This region is renowned for large-scale farming and trading of agricultural goods. 

Theni is also a famous tourist destination, with numerous tourist attractions like the Vaigai Dam, Suruli Falls, Kumbakarai Falls, Velappar Temple, Balasubramanya Temple, etc. Moreover, it offers  a strong communication network with the Madurai and Idukki districts of Kerala. Furthermore, the Tamil Nadu government  oversees  plans to develop IT Parks in Theni on a 10-acre land. 

Its economic prospects make Theni a great location for  real estate investments. The following sections will cover the  commercial real estate investment in Theni.

Top Reasons to Invest in Theni Real Estate

Here are the top reasons to consider investing in properties in Theni:

Production of Primary Raw Materials

Cumbum Valley in Theni is one of the major producers of grapes in Tamil Nadu. Also, one can find vast stretches of tea and coffee plantations. It  offers opportunities for investors to invest in tea factories and vineyards. These spots also play a pivotal role in attracting tourists to these industries.

Source of Passive Income

There is a growing demand for showrooms, motels and shops in Theni with an urban façade. Investing in commercial properties with such infrastructure will help you generate wholesome passive income. 

For commercial real estate investments, you can also consider hotels, restaurants and other tourist facilities for steady income. Again, it  will allow you to benefit from this town’s lucrative tourism sector.

High ROI

Besides being a source of passive income, commercial real estate promises higher returns than residential properties. Moreover, owing to the growing demand for shops and office spaces in Theni, there is a potential for considerable gains from rental income.

Commercial Real Estate Investment Opportunities in Theni

Here are some locations you may consider if you plan to invest in commercial real estate in Theni.

Cumbum

The Theni district includes Cumbum Valley. Some of the most prominent grape plantations and vineyards are here.  These locations  provide  raw materials to several surrounding   wineries and fruit juice industries nearby. Cumbum also attracts flocks of tourists from Kerala.

All of these factors make Cumbum an ideal location for investing in commercial properties, including warehouses for businesses and hotels for tourists.

Koduvillarpatty

Koduvillarpatty is a village in the Theni district of Tamil Nadu. Due to its location near Chennai, Koduvillarpatty is a growing off-grid tourist destination. To address this, one can easily find plots in this village for commercial purposes like resorts and hotels.

Things to Consider Before Buying a Commercial Property in Theni

Here are some specific points that investors must consider before buying commercial properties in Theni:

Lease Structure

A lease is a legal bond that binds investors, brokers and builders. Investors need  a comprehensive idea about every condition listed in a lease agreement. If you are unfamiliar with legal jargon, consider getting help from a qualified expert. A clear idea about lease structure can safeguard investors from risks or exploitation.

RERA Verification

The Real Estate (Regulation and Development)  Act of 2016 mandates the forming  a Real Estate Regulatory  Authority (RERA) in every state. Its main aim is to ensure transparency in the real estate sector.

Therefore, every builder and broker in Theni must register their properties under the RERA portal of Tamil Nadu. You can verify the authenticity of commercial properties from this portal.

Location and Connectivity

Every builder or broker must ensure that the property they  invest  in has a network of well-maintained roads. Commercial properties, be it hotels, offices or warehouses, will flourish if  well-maintained roads or railway stations are nearby.

Also, if construction plans for a highway or metro line are near your property, its resale value will rise. 

Infrastructure

Businesses expect a modern infrastructure that caters to their needs, from workspaces to small motels. Therefore, as an investor, you should choose a property with a  well-constructed water supply, power backup, sewer system, etc. Today, buyers also expect facilities such as restaurants, gyms, ATMs and hotels around their workplaces.

Stamp Duty in Theni

The stamp duty for commercial properties in Theni is given below:

CategoryStamp Duty
Exchange7% on the market value of the higher-value property
General power of attorney to sell immovable property₹100
Sale Agreement₹20
General Power of Attorney given for consideration4% on consideration
Partnership deed (capital above ₹500)₹300
Agreement for building construction1% on the cost of the proposed construction or the value of construction or the consideration specified in the agreement, whichever is higher

Registration Charges in Theni

Here are the registration charges applicable to commercial properties in Theni:

CategoryRegistration Charges
Exchange4% on the market value of the higher-value property
General power of attorney to sell immovable property₹10,000
Sale Agreement1% on advanced money (if there is possession,  then 1% of the total sum is taken into consideration)
General Power of Attorney given for consideration1% on consideration or ₹10,000, whichever is higher
Partnership deed (capital above ₹500)1% of the invested capital 
Agreement for building construction1% on the cost of the proposed construction or the value of construction or the consideration specified in the agreement, whichever is higher

Also Read: Guide for Jabalpur Commercial Real Estate Investment

Theni Commercial Real Estate Sector Outlook

Owing to its location, Theni serves as an off-grid tourist destination from other cities of Tamil Nadu and Kerala. Also, the state government plans to invest ₹267 crore to open up 2,373 new jobs in Theni and nearby districts.

We can also expect several textile parks, food parks and garment manufacturing industries to boom in these regions. Also, the urge for off-beat tourism and staycation trends is leading to the growth of resorts and hotels in Theni valleys.

Commercial Real Estate vs Other Asset Classes

Let’s compare the ROI of real estate with other asset classes:

Commercial Real Estate Vs. Residential Real Estate

Commercial real estate is comparatively more expensive than residential real estate. As a result, finding suitable buyers for commercial properties is challenging.. However, one can earn higher returns from commercial real estate than residential real estate.

Commercial Real Estate vs Gold

One can earn higher ROI from commercial real estate than from gold. However, commercial real estate has lower market liquidity due  to soaring property prices and difficulties in finding buyers. At the same time, gold offers a higher liquidity and is a relatively safer investment.

Commercial Real Estate vs Bonds

Although both are popular  passive income sources, the bond market is more liquid than the commercial real estate market. Also, unlike bonds (AAA-rated), commercial properties always carry a high credit risk as they depend on timely lease payments by tenants. 

Commercial Real Estate vs Stocks and Equity Mutual Funds

The stock market is much more volatile than commercial real estate. As a result, investors need to be aware of the risks when investing in stocks and equity mutual funds. However, besides being a less volatile marketplace, the real estate industry promises more stable returns to investors than stocks and equity mutual funds.

The table below depicts an easy comparative analysis of assets based on their liquidity, volatility, ticket size, and risks.

ParametersCommercial Real EstateStocks and Equity Mutual FundsGoldResidential Real estateBonds
Returns High High Moderate LowModerate
Liquidity LowHighModerateLowModerate
Risk LowHighLowLowModerate
Volatility LowHigh ModerateLowLow
Ticket SizeHigh Varies Varies High Varies 

Explore our website if you plan to bond investment in low-risk bonds with stable returns. Here, you can find top-rated bonds available in the market. So, register now and start investing with no hidden or additional charges.

Steps to Invest in Commercial Real Estate in Theni

Here are the steps to invest in commercial real estate in Theni. 

Step 1: Finalise your budget or the maximum amount you wish to invest.

Step 2: Conduct thorough market research on potential locations and sites that are developing or are soon to flourish.

Step 3: Shortlist a few sites that suit your budget.

Step 4: Take on-site visits to analyse the ground situation closely. You may also consult real estate consultants to know the prospects for developing these sites. 

Step 5: Finalise a commercial property that suits your budget and investment goals.

Step 6: Analyse the official documents like Foundation Certificate, Title Deed, Property Assessment Extract, etc.  

Step 7: Complete the stamp duty and registration formalities to transfer the property in your name.

Step 8: You need to pay service fees to brokers or real estate consultants for availing their services, if any.

Step 9: Finally, you may cover your newly purchased property with an insurance plan. It will safeguard your finances in case of any damage to your property.

Also Read: Guide for Visakhapatnam Commercial Real Estate Investment

Final Thoughts 

Commercial real estate offers many opportunities to invest and earn higher returns. However, investors must consider the potential risks before investing in these properties. The above sections offer a full checklist of the things you need to know before investing in commercial real estate in Theni.

Frequently Asked Questions (FAQs)

Why is it necessary to register my commercial property while investing?

To complete the transfer of your newly purchased property from a seller, it is necessary to register your property. It  ensures your rights on the property, allows you to take part in land transactions and lets you use your land as collateral.

What types of commercial real estate can help me earn high returns?

Properties that can hold a large number of tenants can help you earn higher ROI. For example, office buildings, hostels, warehouses, and hotels are some revenue-generating properties that can yield you higher ROI.

What are the prime locations to invest in commercial real estate in Theni?

Cumbum, Allinagaram, Rathinam Nagar and Koduvillarpaty are some of the best locations in Theni for commercial real estate investments.

Which is better for investing- commercial real estate or residential real estate?

The choice between commercial and residential real estate primarily depends on investors’ budgets and risk appetite.  Generally , residential properties prove to be a comparatively low-risk investment than commercial properties. Also, commercial properties are more expensive than residential properties. However, commercial properties have the potential to generate considerably higher returns.

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