Idea of investing in real estate while ensuring sure shot lease ability (self occupying the office) is certainly a brilliant one, but is it worth it ????
The thought of buying an office comes to every one’s mind while renting an office as it sound wise to pay for installments of loan than paying rent to someone else, especially when reasonable loans are available in the market. In addition to this, one doesn’t have to bother about vacating the place and looking for another place once their lease is over OR unnecessarily be in a position of falling victim of whims and fancies of a landlord.
All this makes complete sense however there are certain unforeseen events/circumstances we would like to bring to your notice before you go ahead and take your final call!!
Future Expansion– This is the most common thing people tend to ignore, as at the onset most of the companies are not very sure about how feasible and long lasting their business would be and they are very tentative about their space requirement. Secondly even if a company is moderately old and successful, one can never be sure about when their requirement for area might increase or decrease owing to advancements in technology and changes in preferences and taste of consumers.
New Technology -Futuristic buildings coming up and making your building obsolete even though it was the best in its time. Better lifts, better facade, better internet connectivity through fiber line connections in the buildings, better and bigger underground parkings are just a few changes to name. The marvel of its time become lower than the run of the mill products of current time .You have been used to being in the best of the buildings so now you think about changing your office to a new building but you are shocked to discover that neither the existing rentals nor the capital value makes any sense when compared with the newly built structures.
New means of connectivity – A new building coming up closer to the metro line will always be the first priority of a person looking for an office space for their company as so is it for any employee who commutes to his office himself . Nobody wants to commute to a far off building through the modes of local transport in the heat and dust of Delhi. So even if you had bought a very well connected building of your time, may be next to the only bus stop at that time , all of a sudden it becomes a painful location to commute to and so will it be for your employees, making it tougher to retain and hire new employees.
New business districts coming up– Times are very uncertain, nobody knew that someday malls will start operating in Vasant kunj and there will be no taker for shops and offices in Basant Lok complex. Same story goes true for PVR Anupam complex in Saket -after the commencement of the Saket commercial complex with all swanky office buildings and glittering malls the leasing of areas in the PVR Anupam complex has gone down and so has the profile of the tenants. There are just a few to name there are many such stories .. lot many brewing… like upcoming commercial projects of NBCC on ring road etc.
Changing needs and demands of time – Earlier an ok building was fine then a good standalone building with glass facade, underground parking , security cameras, power back-up etc came in vogue now a days business district like Aerocity , Saket Complex , Jasola Complex along with big SEZ’s like Cyber city in Gurgaon or other SEZ’s in Delhi, Noida and Faridabad with very large floor plates and millions of square foots of are in every building are in demand , also the proximity to airport has become a major factor in deciding rent ability and profile of the client taking space in a building.
Any there are many other factors as well, and some we are yet to know – for only time will unlock those mysteries !!!
So that is why we suggest that one should not mix investing with business, these are two separate things and should be kept at a safe distance from each.