Retail properties are properties that have the potential to yield profit through rental income or capital gain. Retail property can be of any sort like restaurants, warehouses, office buildings, malls, etc. All these come under retail properties. Here we will discuss some of the leading retail properties and why people invest in retail properties. Firstly, we will discuss different properties which are considered retail properties.
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DIFFERENT TYPES OF RETAIL PROPERTIES:
The list of some of the retail properties are:
- Shopping malls
- Office buildings
- Convenience stores
Shopping malls are one of the most common retail properties. It can be in assorted sizes and shapes and consists of two or more departmental stores. The shops in malls are given for rent to different tenants, which become a source of income. Other than this, various kinds of restaurants and food chains are located inside the malls, which also play a vital role in earning money.
Office buildings are also of distinct categories. They are usually divided into three categories depending on their size, location, and profit graphic. Class A buildings are best in terms of size and construction. Class B buildings have suitable structures but are not located in desirable areas. Class C buildings are neither located in hot regions nor constructed appealingly.
Industrial properties consist of factories and warehouses. Industrial, retail properties help in generating a lot of revenue. The warehouses in industrial properties are of diverse types. Flex warehouses and bulk warehouses are the two most common types of warehouses. These properties are extensive and mainly cover the area of 50,000 to 1,00,000 square feet.
Hotels are one of the most common kinds of retail properties; Hotels are of various kinds like two stars, three stars, and five stars. They are usually located in tourist areas and business districts. There are various categories of hotels that provide different services. Some are limited-service hotels; some are full-service hotels that offer room and food services. Extended stay hotels accommodate guests for long terms, and resorts provide space for staying and provide entertainment services.
Shops and retail outlets are the properties that sell their products directly to the customers. These kinds of retail properties are specially built for the convenience of customers. Retail shops are still incredibly famous among customers even in this digital age where online shopping facility is also available. These shops can be of many types and are in different country areas.
These are the outlets which well-known and famous brands run. The factory outlets sell mid-priced luxury items. Factory outlets run between 50,000 – 4,00,000 square ft. They mostly do well in the areas where tourism is high.
These are the properties that are also designed for earning income. These properties are owned mainly by commercial investors. Amusements parks, cinemas, churches, theatres, and zoos fall in this category.
INVESTMENT IN RETAIL PROPERTIES:
People worldwide invest their money in retail properties because they think retail properties are a reliable source of earning income. Some of the main reasons why people are interested in investing in these properties are:
SOURCE OF EXTRA INCOME: People invest more in retail properties than residential properties because it has a percentage of profit. The profit rate of retail properties is from 6-12%
TAX BENEFITS: Investing in retail properties has tax benefits as well. It helps in reducing the burden of tax significantly.
LOW COMPETITION: The retail investment competition is much less than residential investment. You can invest in retail properties with a small amount of money.
NO EXTRA EXPENSES: Retail investors are free from the burden of extra expenses, unlike those who invest in residential properties.
THE FINAL WORD:
Retail properties possess so much importance in real estate. People residing in various parts of the world invest their hard-earned money in retail properties because it has many advantages. There are other retail properties, so the investors have many options for financing, and they can choose which meets their needs best.
Muhammad Junaid is senior Analyst, and Search Engine Expert. Extensive experience being an IT Manager in Park View City. Work for years with local and international enterprises. Also, represent well-known brands in the UAE.