MUMBAI: Major property markets including Mumbai, New Delhi and Bangalore are likely to witness more appetite for real estate investment with significant rise in rankings of these cities, showed a perception study conducted by PricewaterhouseCoopers and Urban Land Institute.
Outlook for Indian property markets has improved among both domestic and overseas investors with the formation of a stable government at the Centre, said the report. Rankings, as perceived by over 300 respondents globally, of Mumbai, New Delhi and Bangalore have also jumped to 11th, 14th and 17th positions, respectively, in the list of top 25 investment destinations covered in the report titled Emerging Trends in Real Estate Asia Pacific 2015. In the previous survey for 2014, these cities were placed at 23rd, 21st and 20th rank, respectively.
"Mumbai has climbed the most in ranking among the cities in the survey. There is certainly a positive vibe complemented by the expectation of an improved economy and a more transparent environment, keeping interest levels up among investors," said Gautam Mehra, partner, PwC India.
The positive sentiment can be measured from the fact that global real estate funds focused on India are seeking to raise $6 billion in new capital, on top of $1.6 billion raised in the first seven months of 2014. Most of this new capital being raised is aimed at residential projects. The improvement in perception of decision makers including fund managers, occupiers and developers is expected to bring more liquidity to the sector and this may ease cost of capital for realty developers marginally, he added.
Prices of commercial properties in Mumbai have remained stable, while rentals were showing signs of inching up as local businesses showed interest in rolling out expansion plans. Since occupancy that stands at 80% now, were expected to rise, price and rents were likely to increase too, especially for well-located premises, the report added.
While in New Delhi, commercial properties were already witnessing a rebound on the back of a rise in leasing activities, post the 2014 general elections. The PwC-ULI report is based on survey responses from over 380 executives working for fund houses property developers, investors, realty services firms, banks, investment managers, etc.
The report highlighted Tokyo, Jakarta, Osaka, Sydney and Melbourne as the top 5 investment destinations for 2015.