B'luru among top real estate investment destinations: PwC

Bengaluru, along with Mumbai and Delhi, has risen significantly in terms of preferences for investment destinations, according to the Emerging Trends in Real Estate Asia Pacific 2015 report, published jointly by the Urban Land Institute and PricewaterhouseCoopers (PwC).

According to the report, Bengaluru has moved three notches up to the 17th place from the 20th position it held in 2013, while Mumbai is placed at 11 (23rd in 2013) and Delhi at 14 (21st last year).

“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,” PwC India partner Gautam Mehra said. “The outcome of large volumes in e-commerce is likely to translate into demand for large-scale logistics and warehousing space, especially in Bengaluru, he added.

In its city-specific observations, the report said Bengaluru saw rents and capital values of business park facilities increasing steadily over the last few years. Some areas, such as the corridor along the Outer Ring Road, were attracting attention among investors, the report added.

The report said that the prices of commercial properties in Mumbai had remained stable, while rentals were showing signs of inching up as local businesses showed interests in rolling out expansion plans.

Since occupancy rates, which currently stand at around 80 per cent, were expected to rise, prices/rents were likely to increase, too, especially for high-quality and well-located premises. In New Delhi, commercial properties were already witnessing a rebound on the back of a rise in leasing activities, post the 2014 national elections.

According to the report, real estate markets are expected to remain resilient despite weakening economic fundamentals throughout 2015, as capital continues to flow into the industry from a variety of investment sources, both domestic and international, overall in Asia. Japan remains a favoured country for real estate activity, with Tokyo and Osaka ranked first and third, respectively, in terms of investment and development prospects for next year.