PwC: Real estate India trends

By Rob Starr, Content Manager, Big4.com

Bangalore, Mumbai, and Delhi have slipped sharply to the 19th, 20th and 21st positions respectively in the list of 22 investment destinations covered by the Emerging Trends in Real Estate® Asia Pacific 2013, published by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC).

The report stated that for Asia Pacific as a whole, steady economic growth, rising incomes, and stable or increasing property values are all contributing to an overall sense of optimism. However, the outlook is tempered by growing concerns among investors that prime assets in key real estate markets are becoming overpriced. For instance, capitalization rates across Asia remain more compressed than in many western markets, and yields for core office stock in cities such as Beijing, Hong Kong and Singapore are returning as little as two percent.

Topping the rankings for both investment and development for the first time, Jakarta is described as a “surprising” choice given the city’s lack of investment grade stock and its economy, which while growing, lacks the enterprise, scale and infrastructure of its more developed neighbors. However, Jakarta is seen by many real estate professionals as the most favorable emerging market in the region, with business transactions generally easier and more transparent than in other frontier markets such as Vietnam.

From a regulatory stand-point, the introduction of the Alternative Investment Fund (AIF) regime has sought to streamline and regulate myriad investment schemes, in a bid to boost investor confidence.