Key Considerations for Commercial Real Estate Investment

Tuna TAS
Sep 3
1 min read

Commercial real estate often provides higher rental yields and long-term appreciation compared to residential investments. However, it also requires detailed market analysis and carries greater risks. Here are the key factors to consider before investing in commercial property:

1. Location Matters for Commercial Real Estate

Central areas: Proximity to malls, business hubs, and transport increases value.
Emerging areas: Industrial zones, logistics hubs, or university districts offer growth potential.

2. Depreciation / Payback Period

In Turkey, the average payback period for commercial property is 8–15 years.
High-demand rental areas may shorten this period.

3. Rental Potential and Contracts

Tenant profile is crucial: anchor tenants such as supermarkets, banks, or corporates increase security.
Long-term leases provide stable cash flow for investors.

4. Market Trends and Economic Factors

Interest rates, currency fluctuations, and economic growth directly affect commercial demand.
The rise of e-commerce boosts the value of logistics warehouses and mixed-use projects.

5. Taxes and Legal Obligations

Rental income is subject to withholding tax and VAT.
Capital gains tax may apply upon resale.

With the right location and tenant mix, commercial real estate can deliver strong returns. However, investors should always rely on professional due diligence and financial planning.

Practical Guide: Commercial Real Estate Investment

Topic	Key Consideration
Location	Choose central or emerging growth areas
Payback Period	8–15 years depending on rental demand
Tenant Profile	Prefer strong corporate tenants
Lease Contracts	Long-term contracts secure cash flow
Legal Obligations	Consider VAT, withholding, and capital gains tax