Indian cities slipped further in the
regional rankings this year, but did manage to retain a position in the top 25
real estate destinations of the Asia Pacific region. Delhi has maintained its
ranking at 21st position while Chennai has made an entry for the first time at
22nd position while Mumbai and Bangalore slipped to the 23rd and 20th positions
respectively in the list of investment destinations covered by the Emerging
Trends in Real Estate Asia Pacific 2014, published jointly by the Urban Land
Institute (ULI) and PricewaterhouseCoopers (PwC).
In the previous report of 2013, Mumbai and
Bangalore were placed at 20th and 19th position respectively. These low ratings
are attributed to the ongoing economic problems, an uncertain currency outlook
following a mid-year plunge in the value of the rupee, and an investment
environment widely perceived to be unfriendly to international investors.
Still, interest in Indian markets remains high. With national elections looming
and reports on the ground suggesting that the tide may be turning in
receptivity to foreign investment, many foreign funds are waiting on the
sidelines to see what happens, the report states.
Gautam Mehra, executive director at PwC
India said the general slippage of Indian cities in the rankings, coupled with
the retention in the top 25 list, tells a story that on the one hand, there is
the negative impact of the combination of market, currency, regulatory and
political risk which continues to result in a general sense of nervousness and
the tendency of foreign investors to stay on the sidelines, while on the other,
the undoubted potential continues to keep interest levels going. The new
entrant (Chennai) gives another positive twist to the story.
It felt that a more conducive and
transparent environment will set the ball rolling for attracting greater levels
of investment, both foreign and domestic. The report stated that overall for
Asia, the real estate fundamentals are expected to remain strong in markets in
2014, with stiff competition for conventional assets in prime markets boosting
the popularity of niche property sectors and secondary markets for investments.
The report notes that, unlike other asset
classes, real estate in Asia “barely flinched” this year in response to the
tapering of the U.S. economic stimulus and expectations of higher interest
rates. This is due, in part, because of the increase in sovereign wealth and
institutional capital being directed to Asian markets, as well as the
substantial volume of Asian capital being exported from China, Singapore and
South Korea into real estate assets across the region.
The generally positive outlook for many
markets throughout the Asia Pacific region is highlighted by the re-emergence
of Japan (after a five-year absence from the top rankings) as a favored market
for investment and development. The country is one of the largest beneficiaries
of capital flows from other regions within Asia, notes the report. Outside of
Japan, the survey found continuing interest in assets located in Asia’s
emerging markets, including Jakarta and Manila. Source: The Hindu
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