Why small developers prefer residential development

It is a well known fact that in India's commercial real estate is a lucrative proposition developers. So why do we see a new developer in commercial hotspots like Pune apartment to live together rather than commercial projects? There are a variety of reasons. First, the development of commercial real estate is not a need for greater residential plots. In addition, the reputation of the developer in attracting tenants to a significant role in a commercial project, as well as new start developers do not have the necessary track record. In addition to the factors of credibility, the project also requires high cost of commercial projects and large developers established reputation is the only who can raise the necessary funds. In addition, developers need to experience before commercial development, success, gestation period for commercial projects longer than residential projects. Seeing bear the risk of commercial projects, including a lack of experience and capital can lead to failure, developers generally prefer smaller residential, rather than commercial projects. In fact, many inexperienced small developers in the past to launch a small commercial space has been vacant for several years. The reason is that a better grade tenants prefer and they can only be larger, well-known developer of high-quality construction of all facilities.
Residential development can be carried out in small plots, even a small half an acre, while capital requirements are much lower. There are many more financing options available, as well as lower pregnancy - Pune, it usually only takes 1-3 years to sell all the units in a housing project, if the price is right. In addition, cash flow basis immediately before the start of the appointment start; in a commercial project, through rental cash flow only after the completion of construction starts. With India's economic recovery is now in full swing and Pune once again thriving IT / ITeS and manufacturing for national and international business activities, commercial real estate development at the forefront of the development of the city's largest firmly agenda. Because demand for housing and office space to expand the favorable correlation in Pune real estate market is still optimistic about the housing project, as well. And established vendors to meet the high demands of large-scale township family projects, small developers are launching a project size from 50-100 units and units of different sizes from 600-1200 square feet of different small buildings. These developers think this is a go risking key areas, because the competition is less well known in this area developers. The developer of major development projects in emerging areas of the city, the purpose of the use of this demand major and minor workplace hub soon.

SOURCE : WEB