Indian Realty Market Regains Favour of Foreign Investors: PwC

Mumbai: A relaxed FDI (foreign direct investment) policy for the realty sector has reinforced the confidence of overseas investors and has helped India regain its place as one of the preferred investment destinations, according to a survey by PwC.

According to the global consultancy firm, the overall outlook for investments in Indian real estate market seems to be positive on account of the fact that 80 per cent of the foreign capital inflows have been all-equity buyouts by big institutional players.

It noted that even those investors who had burnt their fingers in the first round of investments in 2006-07 “are not wary of Indian markets anymore, and are willing to bet their money once again on the Indian real estate story”.

“The progressive evolution of Indian foreign investment policy for the real estate sector through introduction of various liberalisation measures has reinforced the confidence of foreign investors and has helped India regain favour to be one of the preferred investment destinations in the Asia Pacific region,” PwC said.

The findings of the survey showed that Bengaluru is emerging as the real estate capital of India as it overtook Mumbai in this year’s rankings to become the most preferred real estate investment destination in India.

“While Mumbai and New Delhi have marginally dropped in rankings, from an investment prospect perspective, New Delhi ranks second and Mumbai ranks fifth in the buy recommendation rankings for industrial/distribution properties among the 22 cities covered,” PwC India partner Abhishek Goenka said, citing the survey results.

“Furthermore, Mumbai ranks eighth and ninth, for office and residential buy recommendations, respectively. These numbers, in a way, indicate that the investment prospect rankings of these cities could move up and push into the ‘top-10’ bracket in the years to come,” he added.

Giving city-wise observations, the survey results said that the financial hub Mumbai is on a recovery path as far as the commercial real estate side is concerned.

“On residential end, there is currently a reasonable amount of oversupply in the suburbs; however, with recent slowdown of approvals for new projects, the oversupply situation could get addressed to certain extent,” it noted.

Meanwhile, the survey observed that New Delhi is expected to see the biggest pipeline, primarily due to Delhi-Mumbai Industrial Corridor.

Tokyo, Sydney, Melbourne, Osaka and Ho Chi Minh City emerged as the top five cities in the world in terms of investment and development prospects in their respective realty markets.

The survey was conducted across 22 cities in the world.