Difference between SCO plots and commercial plots

The real estate industry in India is prospering and is expected to grow 9.2% during 2023-2028 (based on certain reports). At the same time, the real estate market in Gurgaon showed a growth rate of 21% in 2022 (first half). However, it is expected to rise this year and in the upcoming years. While considering real estate, you can find different types of land available for purchase.

Two of the most common options are residential and commercial plots. But now, another option, shop-cum-offices or SCO plots in Gurgaon, has emerged and become a great opportunity for real estate investors. You might find SCO plots and commercial plots similar since there are commercial SCO plots. But there are some key differences between these two plots. This blog will provide some information regarding the variations between these investment options. 

Everything you need to know about the differences between SCO and commercial plots in Gurgaon

What are SCO and commercial plots?

SCO is short for Shop-cum-Office, which is a plot designed to accommodate both commercial shops and offices. It is a mixed-use development with commercial space for shops and offices. For example, the ground floor is typically allocated for shops, while the upper levels have offices or apartments. Generally, these developments are found in urban areas and are intended for small to medium-sized businesses. SCO plots have gained popularity in Gurgaon due to their prime location, offering numerous business opportunities.

In contrast, commercial plots are tracts of land designated for commercial purposes, like venues for office spaces, hospitality businesses, shopping centres, and dining establishments. They are designated solely for commercial purposes and provide space for various related activities. The sizes of these plots can vary, and they often occupy locations with accessibility and high foot traffic. Investing in commercial plots in Gurgaon may be a profitable opportunity for those looking to establish businesses in an area with significant commercial activity.

Key differences 

• Flexibility 

The main difference between SCO and commercial plots is that SCO plots are more flexible than commercial plots. SCO plots offer opportunities for businesses to combine office and retail space on the same plot of land. You can use the same plot of land for office and retail space. On the other hand, commercial plots are designated for a single commercial use, such as retail or office. Therefore, businesses needing office and retail space should consider investing in SCO plots.

• Cost of investment 

SCO plots and commercial plots differ in terms of cost. SCO plots may cost more than commercial plots since it offers greater flexibility and customization options. However, the added revenue potential of SCO plots can help balance out their higher cost. 

Commercial plots necessitate a higher investment due to their typically larger size and the need for significant infrastructure development. On the other hand, SCOs are generally smaller in size and only require a smaller investment. It makes them easier to access for smaller businesses or individuals seeking to start their own enterprises. 

• Rental income 

Commercial plots typically generate more rental income than SCO plots. This is because commercial plots are set aside specifically for commercial activities, which means that the rental income is focused on one single source. Nevertheless, investors requiring office and retail space should consider investing in an SCO plot in Gurgaon, as it offers long-term adaptability and revenue potential. 

• ROI – return on investment 

Smaller-sized SCOs are priced more affordably and can result in a faster return on investment. In contrast, larger commercial plots have a greater potential for long-term returns due to their capability for larger developments and higher sale or rental values.

Benefits of investing in SCO plots and commercial plots 

Investing in SCO plots in Gurgaon:

• One of the key benefits of investing in SCO plots is the location advantage. In Gurgaon, SCO plots are located in prime commercial areas well-connected to major highways and public transportation. Businesses in these areas can attract customers from the surrounding regions, leading to higher footfalls and revenue. Since these plots are situated in commercial areas, the property's value increases over time, making it an attractive option for investors.

• The SCO plots in Gurgaon offer the added advantage of customized design and construction. Business owners can select the plot's size, layout, and design in line with their specific requirements. It facilitates the creation of a distinctive property that sets it apart from the competition.

• SCO plots are well-suited for businesses that need an office and retail spaces. For example, a business proprietor can utilize the bottom floor for commercial activities like running a store, while the top floors can be used as office space. It enables businesses to maximize using a single piece of land for multiple purposes, ultimately enhancing their revenue streams.

Investing in commercial plots in Gurgaon:

• Investing in commercial plots in Gurgaon offers investors the benefit of long-term wealth creation. Based on research, it is estimated that the commercial real estate market in Gurgaon will achieve a growth of 5.4% or more in the next few years. Thus, investors can see a substantial increase in property value over time. 

• Like SCO plots, commercial plots occupy prime locations with excellent connectivity to prominent highways and public transportation.

In conclusion, when deciding to invest in real estate, it is important to clearly understand the differences between SCOs and commercial plots. Whether opting for a commercial or SCO plot in Gurgaon depends on the investor's specific requirements. Regardless of this choice, investing in real estate in Gurgaon has a proven track record of generating excellent returns over time, thus making it an attractive option for long-term wealth.