Real estate developers pushing shop-cum-office plots as another stream for monetisation

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Real estate developers in Gurgaon and Faridabad are pushing shop-cum-office (SCO) plots as another stream for monetisation. Multiple players are coming up with new offerings ahead of the holiday season as investors shift their attention to high-street investments.

Experts say that, driven by market dynamics and an aggressive push by grade-A commercial developers, shop-cum-office (SCO) plots have started to become popular yet again.

“In the current scenario, SCOs are being perceived as a sought-after asset class for new-age investors looking to diversify their portfolios,” said Anshuman Magazine, chairman, India and South-East Asia, Middle East & Africa, CBRE.

Under the scheme floated by the Haryana government, developers can sell plots where buyers can construct up to four floors and use them for office or retail purposes.

Gurgaon-based Spaze Group is planning to come up with 225 SCO plots in 13-acre.

“We would invest around Rs 2,000 crore in coming up with SCOs and low-rise residential floors in the coming two years, “said Aman Sharma, director of Spaze Group. “The developments are planned for the Southern Peripheral Road (SPR), the Golf Course Extension, and the Dwarka Expressway. SCOs are in high demand with the increased residential population in the newer areas.”

The asset class caters to both the retail and office segments in addition to providing freedom to developers in terms of building and customising land needs.

The discretion to build an office space, a restaurant, or even a retail chain depends on the investor and, hence, duly entails the basic hygiene elements of a marketplace.

“M3M has received an encouraging response from SCO plots in Sector 113 and Sector 84 in Gurgaon. Bolstered by strategic location and good connectivity, SCOs have the potential to redefine the commercial real estate segment,” said Pankaj Bansal, director, M3M.

M3M has SCOs in sectors 84 and 113 (98 units sold).

“Plotted commercial developments such as shops-cum-offices (SCOs) are ideal development for offices, banks, retail spaces, backend kitchen, warehousing, among others,” Bansal said. “These SCOs have had an enviable track record of good consumer footfall and lucrative investment returns in NCR.”

The Haryana government’s commercial plotted colony policy has streamlined the segment.

Another developer, Gurgaon-based Whiteland, is planning 34 SCO buildings in Sector 71 of the city.

“The 3-acre land parcel acquired from DLF is strategically located on the main golf course road extension with a frontage of 850 ft. The project will be delivered by October 2022 with a total saleable area of 4.5 lakh sq ft and a projected sales value of Rs 500 crore,” said Navdeep Sardana, CMD, Whiteland.

Following the Covid-19 outbreak, investors and company owners sought protection and security, preferring full ownership of land, which in turn resulted in a surge in demand for shop-cum-office sites.

These mixed-use commercial spaces, particularly SCOs, offer the best of both worlds–maximum capital appreciation and a steady stream of acceptable lease rentals with the least amount of risk, making them an appealing investment option.

“Omaxe has operationalised several SCOs across its townships in New Chandigarh and Ludhiana. For investors, it offers a great return on investment. For retailers and shoppers, it offers shop independence, visibility, low maintenance, easy parking, and a nice ambience,” said Mohit Goel, CEO, Omaxe Ltd.

Between 2011 and 2020, the prices of small-size themed SCOs appreciated by over 350%, and those of large-size themed SCOs increased by 450%. The price appreciation during this period in non-themed SCOs was 65% only.

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