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Strategies in Commercial Real Estate Investment

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Part 1: Why Invest In Commercial Real Estate? Because It’s All About Calculations And Rational Behavior And It Involves Little Emotion!

Individual Shop Lots
Shop lots come with individual titles. A minimum investment of at least RM1 million to RM4 million per lot is required.

Before You Buy
Know your market by envisioning your prospective tenant and observe the nature of surrounding businesses.

What You Could Do
Reduce Convert a 3-storey shop lot into 1½, 2 or 2½ stories instead of adding more floors. This solves possibility of untenanted space and even security issues for top floors. Some tenants may appreciate a higher ceiling space, hence willing to pay more in rent

Undress the building
Remove dark tinted glass or aluminum panel or reflective glass. If it’s not an office area, do not bother to dress the building up.Retail tenants like building material or car showrooms would want exposure.

Strata Office
Strata offices present a lower entry point of investment. At RM250 per sq ft to RM270 per sq ft, a monthly rental of RM3,000 for a 2,400 sq ft unit in Phileo Damansara for example will generate a yield of 6% per annum. It is a good ground to start.

Strata offices are popular among professional firms.

As presented by Stephen Tew, Managing Partner of Hectares & Stratas Sdn Bhd, Past President of Malaysian Institute of Estate Agents (MIEA), Owner of Segambut Tile & Interior Decoration Center (STADEC).

More investor tips on commercial properties to come in Home Finder upcoming edition.

Home Finder, Official Magazine of FIABCI Smart Investment in Property Seminar 2010 on ‘Malaysia Properties: Bubble or Boom?’