Bengaluru is the first Indian city to feature border investors across the Asia Pacific in 2019
CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm Asia Pacific Investor Intentions Survey 2019 findings revealed that Bengaluru – the capital city of Karnataka- for the first time has featured in the list of top ten destinations for cross-border investment across the 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 fundraising avenue for developers and also propel major corporations to lease / purchase space in these developments.
Commenting on the findings of the surveyAnshuman 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 with a significant talent base and world-class infrastructure 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.”
Other key findings of the survey:
- 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 returnsand are focused on value-added and opportunistic deals in the emerging markets such asIndia. This rising interest has propelled Bengaluruinto the top ten destinations for cross-border investors for the first time since the survey beganin 2014.
- More investors in APAC are consideringlending against assets rather than taking equity
- positions as loan to value ratios tighten and banksadopt a more conservative attitude towards realestate financing. Other niche sectors attracting investor interest in APAC include retirement living, supported by ageing populations in Asia; data centres, driven by the increasing use of cloud computing; and healthcare, underpinned by demographic changeand the emerging focus on wellness.
Some key facts about Bengaluru:
Bengaluru is considered as one of the fastest growing cities in India with the presence of important players from the areas of information technology, biotechnology, pharmaceuticals, manufacturing and other sectors. In the past two decades, it has transformed from being a ‘Pensioners’ Paradise’ to India’s ‘Silicon Valley’ and has become the hub of research and innovation.
- 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 USD 800 million, this investment more than doubled annually in 2018. Commercial assets were a prominent choice for investors.
- Bengaluru ranked second on the Global Startup Ecosystem Growth Index by ‘Compass’ Infrastructure in 2018.