For the first time, Bengaluru has been ranked among the top ten global cities in the Asia Pacific region for cross-border investment in the real estate sector.
The investment in the city’s real estate sector has doubled to $1.6 billion in FY19 compared with $800 million in the previous fiscal, a survey by global real estate consultancy CBRE South Asia revealed.
The rise in investment was aided by an interest in commercial real estate assets, which were a prominent choice for investors. Bengaluru’s ranking as second on the Global Startup Ecosystem Growth Index by ‘Compass’ Infrastructure in 2018 also contributed to jump in investments.
According to the Asia Pacific Investor Intentions Survey 2019, India was among the top five preferred markets in APAC on the back of the launch of the first Real Estate Investment Trust or REIT (Embassy-Blackstone) and the improved market transparency. The study added that new infrastructure and potential growth opportunities in the market also contributed to the jump in ranking.
The first REIT by Embassy Group and Blackstone Group LP was launched in India in March this year and 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, the study states.
Commenting on the findings, Anshuman Magazine, Chairman and CEO, CBRE, India, South East Asia, Middle East and Africa said, “Bengaluru has been featured as the first Indian city in the list of preferred investment destinations on the basis of its growing reputation across the globe as home base to several international corporates. The city boasts of a significant talent base and world-class infrastructure. It is also popular for offering several investment grade options in the office, retail as well as residential segments.”
Despite the risk factors, buyers continue to seek higher returns and are focused on value-added and opportunistic deals in 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.