Want To Earn Higher Rental Yield? Invest Near These Co-Working Space Hubs
The monthly rent you earn as a landlord is all very good, but who would not like to earn a little more returns on their property investment? Well, investing in residential properties that are close to areas offering co-working spaces may be a sure-shot way to make that happen.
Private estimates show co-working space absorption crossed seven million square feet in 2018, accounting for 14 per cent of the total leasing during the year. Industry experts also point out that the demand for co-working spaces may grow manifold, considering these makes perfect sense at a time when startups are more of the norm than an exception. As the flexi-work culture grows in the country as more and more new businesses enter the economy, developers peg the demand for flexi office spaces to grow to nine million by the end of 2019.
In case this sounds like an opportunity, all you have to do is look for the right localities in mega cities where many and many such working spaces have already come up or are on are likely to arrive. Let us check that out for you, city-wise.
India’s information capital could be your best bet since the demand is growing while the rental yield is high. Co-working spaces had only a three per cent share in overall leasing activity in Bengaluru in 2017. The share increased to 12 per cent in 2018. Private estimates show Bengaluru’s annual office rental yield is 10 per cent.
Hotspots: Localities that are popular to set up flexi working spaces include Indira Nagar, Marathahalli, Malleswaram, Koramangala, Hebbal, Jayanagar, Banashankari, Basavanagudi and Whitefield. Investing in these localities would be a landlord’s best bet in this city.
Property in these areas would cost you between Rs 75 lakh and Rs 2 crore.
Monthly income: Data available with Housing.com and Makaan.com show, a tenant has to pay Rs 18,800 a month to rent a 2BHK unit in the city. Average monthly rent for a 3BHK flat is Rs 29,300.
Understandably, the share of co-working in overall leasing in India’s financial capital grew from seven per cent in 2017 to 21 per cent in 2018 ─ we are speaking about one of the most expensive office locations in the world, after all! However, Mumbai’s office market yield is 8.5 per cent per annum, global researches show, comparatively lower than Bengaluru.
Hotspots: Investing in comparatively affordable localities would be a wiser idea, considering buying space close to the CBD would cost you a bomb. Andheri, Bandra, Bhandup, Borivali, Chembur, Chandivali, Dadar, Dahisar, Ghatkopar, Goregaon, Juhu are some of the prominent residential localities which you could consider to make an investment.
Property in these areas would cost you between Rs 90 lakh and Rs 2.25 crore.
Monthly income: Average monthly rent for a 2BHK in Mumbai is Rs 30,700. Renting a 3BHK would cost an average Rs 56,400 a month.
Delhi’s Connaught Place is the ninth most expensive office locations in the world. Considering that, start-ups are moving towards peripheries to set working spaces, especially flexi workshops. From a mere three per cent in 2017, the share of co-working spaces in Delhi’s office leasing market grow to 10 per cent in 2018. Office market yield in the national capital is also comparatively high at 9.2 per cent.
Hotspots: Vasant Kunj, Dwarka, Mayur Vihar, Udyog Vihar, Hauz Khas, Saket, Nehru Place, Karol Bagh, Greater Kailash, Golf Course Road, Cyber City are some of the prime locations where co-working spaces have cropped up in the recent past.
Be ready to shell out between Rs 85 lakh and Rs 1.5 crore for properties in these localities.
Monthly income: A landlord can earn an average monthly rent of Rs 16,900 for a 2BHK and Rs 29,000 for a 3BHK flat.
Tamil Nadu capital Chennai saw proportion of co-working spaces go up from mere two per cent in 2017 to five per cent in 2018.
Hotspots: Those who want to make money betting on growth of co-working spaces could explore localities such as Teynampet, Adyar, Tambaram, Nungambakkam and Anna Nagar.
One has to spend between Rs 75 lakh and Rs 1.50 crore to buy property in the above-mentioned localities.
Monthly income: Average monthly rent for a 2BHK unit in Chennai is Rs 15,350. For a 3BHK, a tenant has to shell out Rs 25,600 per month.
It was only an increase of 100 basis points if you look at the numbers. From five per cent in 2017, the share of co-working spaces in overall leasing activity in Hyderabad grew to six per cent in 2018. However, considering property prices are consistently appreciating in the City of Nizams, co-working spaces are likely to claim a bigger share in the times to come. Data available with PropTiger.com show Hyderabad is the only city in India where rates have been consistently rising—rates of property here grew 14 per cent in the third quarter of FY19.
Hotspots: The perfect locations to make an investment in this city could be Gachibowli, HITEC City, Nallagandla, Chandanagar, Manikonda, etc.
Keep a budget between Rs 65 lakh and Rs 1 crore to buy a property in these localities.
Monthly income: Average monthly rent is Rs 15,400 for a 2BHK unit and Rs 25,200 for a 3BHK flat.