Investors in commercial property mainly derive returns from:

• A. Rental income
• B. Capital gains
• C. Interest income
• D. Government subsidies

Answer: (B)

The main driver of returns from commercial property, over the typical investment horizon, is capital gains—the increase in the property's value when you sell. While rental income provides ongoing cash flow to cover costs and service debt, the larger, often more significant component of total return comes from the property’s value rising over time. Factors like location, demand, scarcity, and inflation push property values higher, and leverage can amplify these gains. Government subsidies aren’t a reliable or typical source of returns, and interest income is earned from lending assets, not from owning the property itself.