Mumbai among Asia-Pacific’s top 10 realty investment spots

Mumbai ranks 10th in the list of most attractive real estate investment destinations among the 20 Asia-Pacific cities studied for the Emerging...

Mumbai ranks 10th in the list of most attractive real estate investment destinations among the 20 Asia-Pacific cities studied for the Emerging Trends in Real Estate Asia Pacific 2008 investor survey, carried out by the Urban Land Institute (ULI) and PricewaterhouseCoopers. Shanghai, Singapore and Tokyo are ranked the top three cities in terms of investment prospects in Asia Pacific. Mumbai (10th), Bangalore (12th) and New Delhi (13th) retained their positions within the top 20 Asian cities from the standpoint of investment prospects. Mumbai’s ranking rose from 17th in 2007 to 10th in 2008. Survey respondents attributed the jump in Mumbai’s rank to its “booming commercial activities”.

According to PricewaterhouseCoopers sector leader (investment management & real estate) Gautam Mehra, “The overall response from investors towards India continues to be bullish, with strong buy/ hold recommendations for the major cities of Mumbai, New Delhi and Bangalore across various property sectors. India is attracting huge global capital, although the sheer volume of new capital has elicited a cautious tone from interviewees.”

In terms of favoured property types, the hotel sector is ranked the most attractive for investment in Asia Pacific cities. This is on account of rising demand for hotel rooms both from business travellers and tourists, which has led to high rentals and low vacancies in many of the major cities in the Asia-Pacific region. Ho Chi Minh City ranks first in the list of Asia Pacific cities that are most attractive for investment in the hotel space. Bangalore, Shanghai, Mumbai and New Delhi follow in the rankings.

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The second favoured property type for investment is the office sector. According to respondents, this segment has become fiercely competitive. Ho Chi Minh City is again listed as the top market in which to buy such properties, followed by Mumbai, Tokyo, Bangalore and New Delhi.

Retail, described as very dynamic, ranks as the third most favoured property type. Ho Chi Minh City, Mumbai, New Delhi, Bangalore and Shanghai are listed as the top five markets in which to invest in retail properties. The industrial/ distribution sector, while not a very glamourous investment option, is set to emerge as a “major property type” next year, predicts the report. Currently, it is ranked fourth in terms of investment potential. Ho Chi Minh City, Shanghai, Bangalore, Mumbai and Guangzhou are ranked as the most promising markets in this category.

The residential for-sale segment ranks fifth, and apartment for-rental segment ranks sixth in terms of investment opportunities. The most promising markets for apartment rental investments are Ho Chi Minh City, Mumbai, Bangalore and Guangzhou. In terms of development prospects, the residential for-sale sector ranks first among all property types. Urbanisation, nuclearisation of families and growing income levels are cited as some of the factors why residential development remains the most preferred category for developers to enter.