BENGALURU:Bengaluru, the startup capital of India, has now also earned the honour of being the top investment destination in a tepid real estate market in the country. It has also left the commercial (Mumbai) and the political capital (New Delhi) behind.
Asia-Pacific City Investment Intensity Index from Jones Lang LaSalle (JLL), a global property consultancy, has listed Bengaluru as being amongst the top 20 destinations to invest across the world.
India and emerging Southeast Asia are under-represented in the top 20 cities. Directly, real estate investment is generally difficult for foreigners, and investors looking to take part in market growth may need to go through routes such as debt deals and joint ventures with local partners.
“The high real estate transparency seems to be a major factor behind the strong demand for commercial properties in some cities,” said JLL in the report.
According to Goutam Chakraborty, Director - Integrated Service - India at Colliers International, “The real estate transparency depends on the demand and supply. With regards to Bengaluru’s real estate, the PE funds are able to easily plan their investments and can often even chart out an exit and project returns.”
This, is a result of the high absorption. In 2014, Chakraborty added, there was an actual absorption of 14 million square feet of commercial property. There was also a pre-commitment for another three million square feet, he said.
Since the year 2013, PEs have invested over $6.7 billion, of which 13 per cent has come into Bengaluru’s kitty.
The new ranking of the southern city has placed it above the political and the commercial capitals, Delhi and Mumbai, on the list. This year, Bengaluru was also listed amongst the 20 leading technology-rich cities globally by JLL.
“Despite being a smaller city than the political and financial capitals of India, it has managed to attract a lot of investment in comparison to its size,” the JLL report added.
This index from JLL determines the real estate market liquidity and discovers the extent of attraction investors have towards the city depending upon the direct real estate investment in the last three years. “Real estate investment is generally difficult for foreigners in India, and investors looking to take part in market growth may need to go through routes such as debt deals and joint ventures with local partners,” said Anuj Puri, chairman and country head at JLL India. “The index advises investors to continue to seek core business park or office investments in Bengaluru,” he said.