Indian real estate showing signs of recovery: CBRE

MUMBAI: Several large real estate deals have helped to push the investment volume to 40 per cent in the Asia Pacific region for the third quarter ending September 2014 with Indian real estate showing the signs of recovery, according to CBRE APAC Capital Marketview Q3 2014 report.

Quoting the latest estimate of Oxford Economics that the year-on-year economic growth of Asia Pacific region in 2014 stood approximately at 4.4%, slightly up from its June forecast of 4.3%, the report indicates improvement in the real estate investment for India, due to government stimulus efforts. 

Capital market transactions and institutional investments in the realty market in India during the first nine months of this fiscal stood at approximately $4.5 billion, with land and development stage deals attracting the highest quantum of investments (nearly 60%) from foreign as well as domestic entities during the period.  

This indicates a significant investment in green field as well as brown field development, the report noted.

The report also found that commercial office segment has attracted more than 20% of the total investment amount during the quarter.

In terms of locations for property investment, Mumbai has attracted the highest investment followed by Delhi and Bangalore. Of the total real estate investments made in Delhi and Mumbai during the period of consideration, land and development deals went nearly 60% and 70% of the total realty investments in the cities, respectively. In the case of Bangalore, more than 50% of total investments were attracted by commercial segment. 

In the first nine months period ending September office space transactions increased by about 20% year-on-year, with more large-scale space leases and higher lease volumes reported over the previous year across leading cities in India.

The period also saw significant investor interest in completed and well-leased core commercial office assets and IT parks across major cities. Investment highlights during the nine months of the current year included GIC’s joint venture with Bangalore-based development firm Brigade Enterprises, where the two plan to invest approximately $250 million in residential and mixed-use development in cities across southern India, said the CBRE report.