Investing in property? Commercial is costlier, but delivers better returns

Investors can earn a steady 7-9 per cent rental yield in this segment, compared to only 2-3 per cent in residential

With the residential segment of the property market languishing, many high net worth individuals (HNIs) are now making a beeline for commercial buildings that have the potential to offer them steady rental returns along with reasonable capital appreciation. By opting for completed and leased buildings, these savvy investors are avoiding development risk - the risk of delay in delivery - that has marred returns in the residential segment. 

Robust demand

While the residential space has languished, demand for office space has been strong during the past four years. This year, about 33 million square feet of grade-A space has already