Shops and Business Premises
(i) Locations of the premise:- Shops in popular trading localities will given better security for the rent than shops situated in areas which are partly commercial and partly residential. The best test of the popularity of the district is the make a thorough inspection of the neighborhood and see how many vacant shops there are.
(ii) Type of premises: – Multi- storied building in a business locality will usually be occupied on the ground floor by shops and banks, and on the first and second floor by offices. Commercial properties may yields larger rents in proportion to residential purposes.
Commercial complex have gained popularity during the past 30 years or so. Commercial Complexes dominate the retail trade through superior layout , design and consumer experience than any individual shops. The metropolitan cities of India , other cities or big towns are marked by a prolific growth of informal sector in retail business. The sheer force of unemployment and accompanied by continuous migration from rural to urban areas have accentuated the process of unauthorized occupation of public streets and places by enterprises in small trade and business. But this informal pattern of business attracts only a specific clientele group mostly drawn from the lower and middle income brackets. The elites have opted for a more sophisticated climate for shopping . This is the impulse behind the appearance of high valued commercial complex and huge department stores where leisure hours can comfortably be spent in a congenial marketing atmosphere.
The valuation considerations of the commercial complexes are entirely different from that of individual shops and establishments discussed after discussed earlier.
Office building let out on rent are considered as investment and during course of investmentdecesion, a direct comparison is always made with the yields obtainable and other opportunities. Accordingly, office building are invariably valued according to the investment method which is the determination of the present value of the right to receive a future sum or a series of futures sums by discounting them at an appropriate discount rate.