Tag: real estate analytics

When you think about leasing a big commercial space, you should be fully prepared mentally as it’s a huge undertaking that requires massive monetary investments. When you rent a business space for the first time; it is not only essential to research the market well but also to have relatively good knowledge about the types of commercial leases that can be availed in India. 

In this country, commercial real estate leases are typically term-based. The contract expires after a specific amount of time. In older days, the leases used to be permanent and ever-lasting. Nevertheless, given the current market scenario, and the steep rise in property rates, the picture is not quite the same anymore. 

In India, you will find three basic kinds of commercial real estate leases. While the terminologies may change from place to place, having a fair idea about the concepts could help you to negotiate the best possible deal. 

Here are the three types of commercial leases India:

Gross Lease

Also referred to as a full-service lease, it is the kind of lease where the landlord is required to pay for all the property-related expenses out of the rent given by the tenant. The list of such expenditures comprises insurance, maintenance, and taxes. 

While the landlord is fully accountable for the building, the tenant’s job is to fully focus on the business. It is mostly used for multi-tenant buildings. 

The biggest benefit is that tenants don’t have to be concerned about paying for taxes, insurance, or maintenance. The lease contract states the entire expenses of leasing the commercial space and also the conditions under which the prices may increase in the future. 

Net Lease 

A net lease is a commercial real estate lease wherein tenants not only have to pay for the space they have occupied but also have a contractual agreement where the lessee has to pay a part or all of the taxes, insurance fees, and maintenance expenses for a property apart from the basic rent.  

The net lease comprises of single net lease, double net lease, and triple net lease. One of the main benefits of the net lease is that tenants can regulate their expenses in a better manner by monitoring how utilities are used. They are required to only pay for the actual property tax and the amount for maintenance. If there is no need for extensive maintenance or if the property taxes fall, they may be able to save some money. 

Modified Gross Lease 

Even though it bears resemblance to gross lease, there are some differences. Although the rent is given in a lump sum, there is still some compromise that can happen between the parties. The parties to the agreement can negotiate the expenses which can be integrated into the base rental price. 

Additionally, the costs like the janitorial services and electricity are not included in this list. Since the modified gross lease is tenant-friendly, it seems to be the most popular among tenants. Corporates largely favor modified gross leases over others since they are not accountable for the maintenance of office buildings. 

In a nutshell, when it comes to commercial real estate leasing, each type has its pros and cons. You need to decide on what is the most suitable for your business based on your budget. 

CRE Matrix is India’s preferred real estate data analytics provider. It allows stakeholders across an array of sectors to have the opportunity to see the commercial leasing data of various companies. 

For more such exciting analysis and details on real estate, visit CRE Matrix.

How does India grade it’s office buildings? Is there a formula to this? Why one office building may be A+ in grading and still command a rental lower than a grade A building? All this and a lowdown on how CRE Matrix grades office buildings across India.

Office space is crucial for any firm’s development as the workspace environment plays a vital role in the employee’s mental health and wellbeing. The quality of the physical workplace setting has a powerful sway on the company’s capability to both recruits as well as retail employees. 

Since the work environment is extremely important, companies are now looking out for appropriate and best office spaces in India that can keep their employees satisfied. Happy employees can help reap profits for the business. It is observed that more and more companies in India are becoming very particular about the kind of office space they want in a specific type of commercial building. 

India is filled with different kinds of commercial buildings in any city. If you’re considering taking up office space for your company, you would have many options to consider based on your preferences and budget. The location is one of the many factors that need to be kept in mind before taking up office space in a building. 

Some of the other parameters are the age of the building, amenities offered, parking, design of the building, and so forth. It is based on these criteria that commercial buildings in this country may be categorized as Grade A building, Grade B building, and Grade C building. These classifications may help to determine the rents of the buildings. 

Let us look at the various parameters that help classify the office buildings India:

Amenities 

Grade A buildings are bestowed with the specific grade because they come with a lot of high-quality amenities. They feature facilities such as fire prevention systems, fire-management systems, earthquake-resistant structures, and so forth. Grade A office building Mumbai will have a cutting-edge HVAC (Heating Ventilation, Air Conditioning), extremely safe elevators, and state-of-the-art concierge services. The utilities such as water and electricity are exceptionally effective. These buildings usually house a cafeteria, food court, restaurants, ATMs, coffee shops, and so forth. 

On the other hand, a Grade B office building will have elevators that work well but are not considered to be superior quality. Water and electricity systems are not deemed to be extremely effective. Many may not even come with features such as earthquake-resistant structures and waste recycling units. As for Grade C office buildings, they barely have any amenities. In India, you will not find any lobby area or even elevators. 

Location

Grade A buildings are typically located in the heart of central business districts. In metropolitan cities such as Mumbai or Bengaluru, they are more likely to have enormous open spaces or some kind of greenery landscape that adds to the beauty of the building. Grade B buildings are not so centrally located but manage to have a decent location. Grade C buildings are not perched in busy commercial hubs and can be located in any lane or road. 

Parking 

Grade A buildings have professional management and have adequate parking for every corporate tenant, their employees, and their guests who could visit occasionally. Grade B buildings generally compromise on factors like security and parking. They will have enough for the employees of the corporate tenants but not extend it to their guests. Grade C office building MMR will not have enough parking spaces to fit vehicles of all employees of their corporate tenants. 

Architecture 

Grade A office buildings are typically architectural marvels and extremely posh and upscale in their looks. These buildings are typically newly built and have the necessary infrastructure in place. Grade B buildings are usually older than Grade A buildings and are not as shiny and glitzy as the former. Grade C buildings are usually the oldest as compared to the other two and typically need a lot of repair work. 

We deploy 5 other parameters which form our secret sauce to grade buildings. To know more, sign up with us and we’ll take you through how we grade buildings using artificial intelligence, machine learning and a lot of human intelligence.

CRE Matrix is India’s preferred real estate data analytics platform. We can provide stakeholders with every minute detail about a commercial building including its grading. 

For more such exciting analysis and details on real estate, visit CRE Matrix.