Is Opening A Restaurant Your Small Business Idea? Here Are 5 Factors To Look For In Commercial Real Estate


If you’re one of the enterprising individuals who’ve taken the gutsy step of opening your own establishment, congrats! You know what they say about fortune and the brave.

First things first, though. Your restaurant needs space, and unless your granddad left you some commercial property (lucky you!), you need to find a building to rent or buy. Given today’s extremely competitive real estate market, especially in urban areas, it can be hard to find commercial space for restaurants that’s reasonably priced.


Restaurant space in Bangalore


There are some major factors that affect the value of commercial real estate. Take a look at some of these, and use them to your advantage when finding a place for your restaurant!


It’s All About The Location

Whether you’re looking at rent or sale prices, location is the prime factor that decides the value of a property. If a building is surrounded by a buzzing area (where establishments like theatres, shopping malls, and salons abound), then you’ll probably have to pay premium rates to set up even one stove and two small tables.


Location for Restaurants


If location is your priority, you should be prepared to pay premium rates.

Alternatively, you could try something just off the main commercial areas. Or try an offbeat location, like an upmarket residential area.


Older Buildings Equal Reduced Rent

This is the age-old rule of thumb; unless a building has heritage value, chances are that its age will reduce its rent and sale value.

By keeping an eye out for properties like these, you can strike a good deal, especially in otherwise expensive locations. Note, however, that in absolutely prime locations like junctions at major commercial streets, the age won’t make as much of an impact due to incredibly high demand.


Property Size Vs. Property Price

Size matters because of obvious reasons; larger properties cost more.

A key thing you need to decide is how much space your business will take up, and how much you can realistically compromise on. If you can manage to run your restaurant in a relatively smaller area, you can avoid paying more than you need to.


Size of property vs Price


Deciding this beforehand will keep you from making errors in judgement when facing a choice between size and price.


The State Of The Economy

If you got a paisa for every time you heard the economy being blamed for something, you wouldn’t need a job anymore—that’s how much flak the economy takes. However, this grumbling isn’t entirely without reason.

The health of India’s economy can be gauged by factors like prices of goods, employment rates, manufacturing activity, and Gross Domestic Product (GDP). Simply put, the more sluggish our economy, the more sluggish real estate becomes.


Money expense for a property


By studying things like the economic cycle of inflation and recession, you can try and stay ahead of the game. This helps you make sound financial decisions for your business.


Interest Rates Have A Profound Effect On Real Estate

The economic happenings around the world indirectly influence real estate prices through the interest rates.

Political events, inter-bank happenings, and the global economy are all major controlling factors in interest rate trends. This means that these factors affect the value of the property you’re considering for your restaurant.

This is how interest rates affect your rent or sale price: falling interest rates push down mortgage rates. This creates a higher demand for property, and this demand causes prices to rise. Conversely, rising interest rates can reduce demand for, and subsequently, the prices, of real estate.

Understand how this factor influences your property rates, and you’ll be able to make smarter decisions and strike great deals.

Understanding these factors, when buying or renting space for your restaurant, will bring you a step closer to better financial decisions. In fact, having a great place to run your business out of is half the battle won, giving you a head start over the competition.

Now, so long as you don’t cook like Raju’s mum from 3 Idiots, good luck with your restaurant!




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