Real estate consulting firm CBRE South Asia’s ‘Asia Pacific Investor Intentions Survey 2019’ findings revealed that Bengaluru for the first time has featured in the list of top 10 destinations for cross-border investment across Asia Pacific. The survey revealed that India was among the top five preferred markets in APAC on the back of the launch of the first REIT (Embassy-Blackstone) and the resulting improved market transparency. The drivers for this trend were new infrastructure and potential growth opportunities in the market.
The first REIT by Embassy Group and Blackstone Group LP was launched in India in March this year and it is expected to catalyse investments in the country. Improved investor sentiment in office assets is likely to expose potential quality buildings as a fund-raising avenue for developers and also propel major corporations to lease / purchase space in these developments.
Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE, said, “Bengaluru featured as the first Indian city in the list of preferred investment destination on the basis of its growing reputation across the globe as the home base to several international corporates. The city is also popular for offering several investment grade options in office, retail as well as residential segments.”
On the overall positioning of the Indian real estate market in APAC, he added, “A stronger interest in office properties followed by industrial & logistics, multifamily, hotels and retail were the preferred sectors of investment in APAC. There is significant scope for investment in India and the rising consumption and growing demand in the logistics sector, particularly, will continue to stimulate investors to seek opportunities in this market.”
Major challenge
In almost all the geographies across APAC, the lack of investible stock for sale remains a major challenge for investors.
The acquisition of numerous institutional-grade properties by long-term buyers in recent years has constrained the availability of assets in developed markets, particularly Singapore, Hong Kong and Japan.
Despite the risk factors at the forefront of investors’ concerns, buyers continue to seek higher returns and are focused on value-added deals in the emerging markets such as India.
Bengaluru is considered as one of the fastest growing cities in India with the presence of important players in the areas of information technology, biotechnology, pharmaceuticals, manufacturing and other sectors. In the past two decades, it has transformed from a ‘Pensioners’ Paradise’ to India’s ‘Silicon Valley’ and has become the hub of research and innovation.
Takeaways
· Known as one of the key investment destinations in the country, Karnataka’s Ease of Doing Business ranking was eighth across India in 2017, ahead of Maharashtra and Tamil Nadu.
· On the Social Progress Index 2017, Karnataka ranked second after Delhi.
· While Karnataka is the leading State in the machine tools industry, Bengaluru alone produced 60% of machine tools (in terms of value) in the country in 2018.
· Bengaluru was ranked first on the ‘Best place to live and work’ list by Mercer in 2018.
· In 2017-18, the total real estate investment in Bengaluru was almost $ 800 million. This investment more than doubled annually in 2018-19. Commercial assets were a prominent choice for investors.
· Bengaluru ranked second on the Global Startup Ecosystem Growth Index by ‘Compass Infrastructure’ in 2018.
