Bangalore, Mumbai, Delhi real estate rankings drop

Mumbai:  Bangalore, Mumbai and Delhi, which are the top three realty markets in the country, have sharply slipped to 19th, 20th and 21st positions respectively in the list of 22 investment destinations in the Asia Pacific region, the survey 'Emerging trends in real estate 2013' by the Urban Land Institute and PricewaterhouseCoopers (PwC) said. 

In 2012, these three cities were placed at the 10th, 15th and 12th position respectively in this study.  The report is based on responses from more than 400 people including real estate developers, investors and brokers. The PwC list has been topped by Jakarta, Shanghai, Singapore, Sydney and Kuala Lumpur,  a media report said.

"The uncertainties in the real estate market is holding back international investors from investing in the country as they were doing in the last few years. Given the current scenario, where there is little or no clarity on policies, foreign investors will continue to adopt a cautious approach," PwC India executive director Gautam Mehra told reproters while releasing the report here. 

According to the survey, Bangalore is perceived to be a mature market and has demonstrated fairly stable prices and reasonable absorption trends. 

However, the report notes that the Southern metro's over-reliance on the sluggish global IT industry translates into low growth potential in the medium term. 

The financial capital Mumbai is plagued with over- supply across asset classes, resulting in record levels of vacancy and stagnant yields, it says. 

The report, however, has cast a positive light on Delhi and the surrounding NCR area in view of the expected master development plans for Delhi, Gurgaon and Noida, indicating a flight of capital from the Western and Southern regions to the North in the medium-term. 

However, the report paints a rosy picture going forward. It says despite various issues plaguing the sector, there is hope ahead especially after the recent decision to permit foreign investment in multi-brand retail, Mehra said. 

"The favourable demographics and inherent but latent demand continue to be redeeming factors. Several micro-markets continue to provide suitable investment opportunities for investors and end-users alike," a Financial Express report quoting him as saying. 

"While the domestic realty sector may currently be grappling with certain socio-political and economic issues, particularly rising inflation and interest rates, uncertainty on fiscal policies, and subdued interest from opportunistic investors, there appears to be light on the horizon," he says. 

"One area that is yet to be developed is the real estate investment trust (REIT) regulation, which can provide an additional exit route for investors and enable retail money to be channelised into the sector through a regulated network," Mehra concludes.

Gujarat to have four more airports

Fly out: Scene at Ahmadabad Airport

In a bid to strengthen infrastructure and also to promote religious  tourism, Gujarat is planning to build four more airports simultaneously, which will add to its already 17 functional airports.  Seventeen top consultancy firms including Ernst and Young, Mott MacDonald, PricewaterhouseCoopers and Edges India have shown interest in developing these airports.

On Monday, these firms submitted bids for the proposed airports that can handle mid-sized airplanes at Palitana, Ambaji, Dwarka and Ankleshwar. Officials from state aviation department told Indian Express that this was a technical bidding and by February 15, the evaluation report will be released which will pave the way for financial bidding.

At present, the state has 17 airports (excluding the two at Daman and Diu), which makes it having the largest number of operational airports in the country.

“Gujarat is going to be the first state to start developing four airports at one go. The purpose is to boost religious tourism as well as providing infrastructure for the industries,” said Ajay Chauhan, director of state’s civil aviation department.

The Airport Authority of India (AAI) has already cleared the techno-economic feasibility report for the airfields located at Dwarka in Jamnagar and Ambaji in Banaskantha district, both famous destinations for Hindu pilgrims, Palitana in Bhavnagar district known for Jain pilgrimage and Ankleshwar, an industrial hub in South Gujarat.

According to state aviation officials, the construction of the airports will be taken up in phases. In the first phase spanning two years, the construction of the airports is likely to be completed to make them operational. Afterwards, the airports may be upgraded depending on the requirement.

In a bid to boost the aviation industry in the state, the state government slashed the tax levied on air turbine fuel from 30% to 5% in 2011 to attract airlines for starting intra-state air-connectivity. There is also a budgetary provision of Rs 12.70 crore for the development of airports in the state.