WHY TO INVEST IN PRE-LEASED PROPERTIES AT AHMEDABAD (INDIA) ?
PRE-LEASED commercial properties provide fixed lease income over a 3 to 9 year period and successively exit with a reasonable high capital escalation.
India is going through a phase of high inflation and high interest rates. Repo rate (Repo rate is the discount rate at which banks borrow from RBI) & Reverse Repo rate (Reverse repo rate is the rate at which RBI borrows money from banks.) are 7.50% and 6.50% respectively. To limit inflation Interest rates are high.
When RBI will slowly reduce the interest rate, once inflation is under control during such phase preleased properties are best options to get good rental yields & exit at such a point will give best returns for your investment.
In Ahmedabad most of the PRE-LEASED PROPERTIES are FREE-HOLD PROPERTIES – you become the exclusive owner of the property as well as the land (with proportionate pro-rata share) on which it is constructed. It gives ownership right to the property holder.
EXPECTED RETURNS ON PRE-LEASED PROPERTIES WITH RESPECTIVE TENANTS:
1. If the tenant is Bank the rental yield is 6% to 6.5% of the investment, because these tenants stay for a longer period, so it yield lower returns.
2. If the tenant is MNCs they deliver high rental yields, in the bracket of 8% to 9%.