Why Invest In Retail Properties?

By: Taro Chellaram /Real Estate Articles/Mar 09, 2019

Why Invest In Retail Properties?

Are you considering investing in commercial real estate? Not exactly sure which type of property to start with? Fret no more!

 

Thousands of investors wrestle with this question daily. And, although the answer differs case by case, we have found that many new investors under appreciate the opportunities of seeking out retail properties. Not only do such properties drive day to day business, offer a predictable revenue stream, but it's also an opportunity to invest in property that will appreciate in value.

There is an oversupply of shop lots today but there is also demand for it, says Malaysian Association for Shopping and High-rise Complex Management's past president Richard Chan.

 

Paul Nixon, of Carey Real Estate, notes that there is a growing preference among investors to invest in commercial or retail property, he says when it comes to issues of financing, commercial properties currently have it easier with fewer restrictions in comparison to residential properties.

 

This is true! The reality is that small venture capitalists drive daily operations; entities such as restaurants, convenient stores, and boutique shops, these entities offer consumers options in the convenience of their neighborhood. By choosing to invest in neighborhood shopping centers and strip malls, investors are opening themselves up for an opportunity to monopolize on long standing business relationships. Retail properties also offer longer leases, with average contracts extending 3-10 years, which is more attractive to investors who will then be able to enjoy greater stability for extended periods of time.

 

Moreover, unlike other commercial properties, a retail venture offers a predictable revenue stream. Why? People shop! When the economy is strong and healthy, people are eager to shop and support local businesses and startups, such activities are the driving force for flourishing real estate and retail business. Small ventures such as convenient stores, restaurants, and small shops drive day to day business. Skilled investors, seek out retail ventures because they realize that there is a great demand for commercial properties and the market value of retail spaces will rise.

 

Another proponent to retail spaces is their tendency to appreciate in value over time. Retail properties are able to maintain and even gain value from various factors like proactive management making cost-effective improvements to the retail property, which improves the properties usability.



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