New Delhi, 19 June 2019: CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm’s Asia Pacific Investor Intensions 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 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 survey Anshuman 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 returns and are focused on value-added and opportunistic deals in the emerging markets such as India. This rising interest has propelled Bengaluru into the top ten destinations for cross-border investors for the first time since the survey began in 2014.
– More investors in APAC are considering lending against assets rather than taking equity
– positions as loan to value ratios tighten and banks adopt a more conservative attitude towards real estate 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 change and the emerging focus on wellness.