Office vs. Retail Spaces: Which Commercial Property is Right for You?

Choosing the right commercial property for your business mainly depends on your line of work and business model.

For instance, if you run a customer-oriented business with hard, visible products to sell, then a retail space or showroom with walk-in traffic would be the perfect place.

Whereas, if your business is more back-ended and needs a quiet work environment, you might want to go with an office space.

Likewise, several other factors can help you choose between an office or retail space for your business.

Let’s take a look.

• Office vs Retail Space Investment

First things first, i.e. the cost!

Office spaces, in general, are more cost-effective than retail properties as the latter may require more visibility and traffic.

As such, retail spaces are often located in high-traffic areas and prime locations that bustle with crowds and potential shoppers, which can significantly boost overall prices.

Office spaces, on the contrary, need much less visibility and walk-in traffic to carry out their operations or services. E.g., law firms, consultancies, finance companies, etc., all of which can be operated seamlessly from quiet and remote locations. As a result, they come much cheaper than high-end retail properties.

At the same time, office spaces usually have lower lease terms with more stable income than retail leases, as they can be quite expensive and volatile depending on market trends.

That said, let’s turn our attention to other key differences between an office and a retail space.

• Suitability

Office spaces are more suitable for professional services providers; whereas, retail properties are best for merchants and front-end businesses like restaurants, salons, apparel brands, and so on.

In other words, if your business relies on direct customer interaction and requires high walk-in traffic, then it is the retail properties that should be your first choice.

However, if your business is less dependent on moving traffic and does not need a lot of visibility in the physical market, then you can always go with an office space.

• Features

Similarly, since office spaces are meant for minimal customer interaction, they are also designed in a way that prioritizes functionality over customer experience.

To be specific, while retail spaces emphasize visual appeal and aesthetics with fancy displays, windows, and layouts to attract and engage potential customers, office spaces are usually divided into several work areas such as conference rooms, cubicles, and dedicated cabins for the higher-ups or C-suite with no room for external affairs.

Plus, an office space might also have a cafeteria or similar facilities for their employees and workforce, whereas a retail space does not.

• Scalability

The biggest difference between an office space and a retail property is the matter of scalability that arises as your business grows.

Now, while scaling the productive capacity of office space is somewhat easy, as it can be done in numerous ways like increasing your workforce, outsourcing the work, or hiring remote workers, doing the same with a retail property is quite challenging.

Firstly, due to the limited space, and secondly, if the transition to a different location is taken, it can seriously hurt the traffic and sales.

As far as switching the office space is concerned, it is relatively easier and causes no substantial loss to the company or business practices.

• Market Trends

Ongoing and upcoming market trends can significantly shape your decision as to which commercial property should be right for your business.

That is, if your business does not depend on short-term market trends as they are forever changing, then choosing an office space would be your best bet.

On the other hand, if you are willing or required to deal with the ever-changing landscape of market trends then it is the retail properties that you should go with.

A perfect example of this is e-commerce which is changing the retail landscape as we speak by allowing businesses to go online.

Similarly, in the office space industry, it is the booming work-from-home facility that influences the demand for space to be low or high.

In essence, it is all about the consumer and market trends and how important it is for your niche to abide by them that help you choose the right commercial property for your business.

To further help you make the right decision, here is our quick commercial real estate investment guide that you use to get the right commercial property in Ahmedabad or anywhere else for that matter.

Tips on choosing the right commercial property

1. Look for prime locations with high walk-in traffic, especially if you have a retail business to run. Offices can suffice in less busy and remote places.
2. Consider proximity to main roads and highways that connect public amenities and transit stations.
3. Get familiar with your tenant contract, such as its lease period, rent escalation, and so on.
4. Check maintenance costs.
5. Calculate your ROI and see which one suits your expectations.

Last but not least, always have sound exit strategies in place without having to bear any penalties for early departure from the deal.

Conclusion

Considering the wide range of financial and practical factors, when choosing a commercial property for your business, you can always get help from a dedicated realtor who has some authority in the commercial real estate of your city.

Speaking of which, to find the best commercial property in Ahmedabad, you can always hit us up at Shafalya Infra which is one of the leading real estate dealers in the commercial hub of Gujarat.

With years of experience and successfully delivered projects under our belt, we proudly serve our clients in both residential and commercial sectors.

To book a prime commercial property in Ahmedabad, contact us now, and we’d be more than happy to help.