Real estate developers are looking out for alternatives to inject liquidity through strata sale of commercial assets, according to a report by ANAROCK Property Consultants said.
Strata sale is sale of assets to retail or individual investors.
To maintain cash flow, many developers are currently listing anywhere between 25 to 40 per cent of their office supply for strata sale.
According to chairman of ANAROCK Property Consultants, AnujPuri, strata sale of office and retail spaces are emerging as a lucrative option for a few developers to maintain cash flows.
The existing average rental yield is 3 per cent of housing.
The report added that Grade A commercial assets rental yields of 8 to 10 per cent, while Grade B properties generate anywhere between 6 to 8 per cent.
According to ANAROCK, the average ticket-size for commercial space investment is around Rs 10 lakh in tier-2 cities, while in tier-1 cities ticket-size of commercial space investment is as high as Rs 10 crore.
In early 2019, realty major Prestige Estates had announced its plan to strata sell 25 per cent of its office assets to individual investors who are looking to enter the competitive markets of high-yield realty assets.
The report said that what seems to be a “rare win-win” situation for real estate investors and developers in the present situation is that the former can get high returns and the latter can generate liquidity for expansion of the business.
Strata sales for developers also eradicate the need to manage commercial properties. It allows them to consolidate their rental business, added AnujPuri.
According to ANAROCK, sliding return of investment, or ROI, in residential property is luring more highnetworth individuals and NRI investors. These investors were earlier focused on luxury real estate to strata-sold commercial spaces.
(Source : Livemint)
