Mumbai is the third most promising investment market in the Asia-Pacific region,
Mumbai is ranked third as the most promising investment market,and the first as the most favoured development market,in the recent Emerging Trends in Real Estate Asia Pacific 2011,a real estate forecast jointly published by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC).
Projections for Mumbai in 2011 look good,as the citys investment ranking rises five spots to third, the report states,adding that this city is clearly the best performing and most active real estate market,and despite some concerns about oversupply,development potential for most real estate sectors remains promising.Development in Mumbai continues to be an area of interest,with the city ranking first in the 2011 results,up from second in 2010.Oversupply continues to be a serious risk for the area,but respondents don't think many people are worried about real estate turning into a bubble again.
In terms of investment,buying opportunities ring out in the retail,apartment and industrial sectors, the report adds.
The report also notes that India's GDP continues to grow and shows "no real signs of declining anytime soon.Over the past 30 years,it says,the country has managed to sustain a GDP growth rate average of 10 percent.Projections for 2011 are 8.5 percent,and forecasts are for growth of between 9 and 10 percent by 2015.This is a significant move from the mid-6 per cent range found in the early 2000s.
To support this economic expansion,there has been a large amount of growth in the working population of India.Also,the government continues to make progress in introducing reforms that have helped the country introduce new private equity to capital markets,create a new platform of employment,and inject capital into infrastructure programs.Exports of both goods and services from this region continue to increase,marking more business interest abroad.
Speaking of the region as a whole,the ULI/ PwC report also states that the cloud has been lifted from Asia Pacific real estate markets,with the fiscal outlook for most of the Asian countries more promising than that for Europe or the United States.
Many,if not most,Asian economies have rebounded to pre-crisis levels,and real estate markets,although mostly slower,are headed toward some semblance of normalcy,"said ULI Asia Pacific Chairman C.Y.Leung,chairman of Asia Pacific,DTZ.
"The distress that was so widely predicted a year ago for most of the region's largest markets has by and large failed to materialise."He noted that steady activity by buyers indicates that Asia's real estate markets "are strong enough to grow into the high expectations current pricing trends imply,"particularly because of the shortage of both housing and commercial properties that persists in many areas.
"The economies and financial systems in Asia Pacific have gradually improved over the years.The demand for property,especially in the emerging markets,has been growing.With the release of QE2 (a second round of quantitative easing by the Federal Reserve Board) in the U.S., more funds are expected to flow into Asia Pacific markets.Property would be an alternative choice of investment after equities, said KK So,Asia Pacific Real Estate Tax Leader of PwC."However,investors should avoid taking excessive credit risks,and pay attention to policy changes, he added.
TOP INVESTMENT MARKETS FOR 2011
The predictions Emerging Trends makes for Asia are based heavily on projections for strong activity in China and India."I think there are buying opportunities for some time,"states one investor.The report rates Singapore,Shanghai,Mumbai,Hong Kong and New Delhi as the top five investment markets for the year: >> Singapore,the top rated investment market,continues to attract major investors as its financial and high-tech industries flourish.The city's gross domestic product (GDP) growth rate is expected to finish this year in the double digits,and remain in the four-percent range the next three years.This growth is mainly attributed to foreign awareness of the prospects that Singapore has to offer;however,domestic capital involvement seems to have increasedIts a mature market and carries less political risk than others. Industry sectors of most interest to investors: residential,office and retail.>> Shanghai is ranked second for investment potential,falling from its top position in the 2010 report,which indicates that sharp increases in property prices in the city may have dampened some investor interest.Still,overall sentiment is that the city is set firmly for recovery and will remain a favoured investment target.More than half the survey respondents believe that retail is a smart buy,and more than one-third are interested in the office sector.Demand remains strong for luxury and residential properties.The city also scored high marks (ranking third in the survey) for development - particular in the office sector -- despite government efforts to limit overbuilding and speculative purchases.>> Mumbai ranked third as the most promising investment market,and first as the most favoured development market.Buying opportunities ring out in the retail,apartment,and industrial sectors in 2011.Leading the charge is retail,with over half of the respondents - a 20 percentage point increase over 2010 - believing it is time to purchase properties in that sector."Residential real estate continues to find foreign investor favour,"states one investor.Hotel investors believe buy or hold is the appropriate position in the market,based on hotel quality and location.The majority of survey participants believe investors in the office sector should have a hold position.>> Hong Kong ranked fourth for investment prospects;its global appeal is a strong factor in its economic rebound,and robust demand is driving up rents.Although the development outlook is less positive (Hong Kong ranked 12th overall for development prospects),Emerging Trends notes that the residential sector shows potential.Hong Kong is an area where people continue to move into bigger apartments, says the report.Among the choices of "buy,sell or hold" by property type,"hold" is the top choice among respondents for each sector.>> New Delhi - New Delhi ranked second for development prospects,and fifth for investment prospects.The driving force: the government's plans to boost infrastructure with new roads,railways and airports;and its approval of development plans for tens of thousands of acres of land for urban development.Foreign institutional capital is drawn to the city,with housing and hotels as the most favored categories.
Among all the property types,Asia's residential sector ranked highest in both the investment and development categories.Best bets for residential investment in 2011: Mumbai,Bangalore,Jakarta and Ho Chi Minh City.Retail ranked second as the most attractive property type for investment and development.Best bets for retail: Ho Chi Minh City,Shanghai and Mumbai."Recovery (in retail) throughout the Asia Pacific won't be near the struggle other countries continue to face after the start of the recession in 2007.Projections suggest a jump in spending from both domestic and global consumers,"notes the report.
The office sector was viewed less favorably,and ranked higher for investment prospects than development,with interest from foreign investors limited to "very,very,prime" locations.Half the respondents listed Tokyo as the top market for office investment,followed by Jakarta,Ho Chi Minh City and Singapore.
On the whole,survey participants regard Asia as the part of the world that is showing the most growth,in terms of the real estate industry."The area's economic expansion should be the key driver to help propel commercial real estate investments and developments across the region,"Emerging Trends says."The real estate market is back,fund raising is strong in Asia,local banks are providing financing,and capital is everywhere."
Emerging Trends provides an outlook on Asia Pacific real estate investment and development trends,real estate finance and capital markets,and trends by property sector and metropolitan area.The report is based on opinions of over 280 internationally renowned real estate professionals.
