Property investment has always been a favourable option not only for individual investors but also for institutional ones. In the past, institutional investors showed interest towards commercial spaces as against residential spaces primarily owing to stable returns and recurring rentals. Of late, commercial development has been able to attract equity investors due to long tenor rental generating capabilities. Further, REITs bring liquidity for their investment from commercial space. On the other hand, residential developments being self-liquidating in nature have a limited development timeline, and hence lag in equity investments. Residential developers are offered more structured debt options. With RERA coming into action and emphasis on rules and regulations, institutional developers such as Godrej, Mahindra and Shapoorji are entering the realty market to develop mid-to-large housing projects. Most of these developers are either backed by strong institutional foreign funds or strong balance sheets of the parent corporate.
Here is a list of few cities that have been attracting investors from all over the world:
Bengaluru, also known as India’s Silicon Valley, has outperformed other markets in the country being the hub in the IT sector. The demand for commercial property continues to grow steadily. Ready-to-move-in properties has witnessed the highest growth. Housing needs of people who prefer to stay close to their workplace have given a big boost to the residential projects around IT and commercial developments. Availability of large scale lands are perfect for the increased affordable housing sector. Robust road infrastructure, presence of excellent educational and medical facilities makes Bengaluru the preferred home-buyer market. For investors looking for stable returns, Bengaluru provides multiple options. Infra projects such as road widening projects, Peripheral Ring Road (PRR) and development of large townships will contribute to improve investor prospects in the peripheral areas. Whitefield, Outer Ring Road, Sarjapur Road as well as few locations in North Bengaluru are the micro-markets to watch out for.
Mumbai being the financial capital of India attracts a lot of investors for residential and commercial spaces. Being a metropolitan and the most populous city in India, with an estimated population of 12.4 million, Mumbai has always enticed people from all over the country. The city always provides constant growth and development in employment opportunities. Mumbai, however is the most expensive property markets in India. It also gives lucrative returns to investors due to steady rentals, which the commercial property buyers fetch. With the upcoming metro and monorail projects, connectivity to the high-density corridors to distant parts of the city will result in an increase in real estate prices in corridors through which the Metro will run. Property in Panvel, Navi Mumbai is already witnessing increased demand due to the proposed airport. Due to lower cost of operations, many IT companies have been shifting to places like Vashi and Airoli in Navi Mumbai. Thane is also attracting demand in housing due to the excellent infrastructure it enjoys.
Pune continues to attract investors owing to its proximity and connectivity to Mumbai. It is not only a major educational hub, but also home to IT companies, engineering, and automobile manufacturers. Employees and student migrating from different parts of the country have the made demand for housing in Pune a good option for investors to invest in the residential market. Infrastructure initiatives by the state and central government such as Metro and Smart City projects will give the much-needed boost to the real estate micro-markets in Pune. Few preferred micro-markets for investors have been Wakad, Balewadi, Baner, Hinjawadi, Bavdhan, Viman Nagar and Kharadi in Pune.
Hyderabad is witnessing a surge in housing demands through the government’s strengthening infrastructure around areas where major IT establishments are coming up. Hyderabad is emerging with major transformation in infrastructural developments like strategic road development plan, construction of four major flyovers and three corridor elevated metro line of the Mega Hyderabad Metro project. The city is becoming as the most active residential and commercial markets. The growth of the IT/ITeS sector has further resulted in the development of the organised retail sector in Hyderabad. Properties are better-priced and closer to work options are being preferred by the salaried/professional home buyers. Top micro-markets in Hyderabad include Hitech City, Gachibowli, Jubilee Hills, Banjara Hills, Panjagutta, Begumpet while the upcoming IT/ITES/residential markets are Rajendra Nagar, Kokapet, and Manikonda.
Chennai has a leading share in the country’s automobile exports and leads to massive employment generation due to presence of number auto manufacturers and industrial manufacturing units. Since 2000, IT companies have also influenced the Chennai market with South region of Chennai gaining the most from their influx. E-Commerce giants like Amazon, Flipkart, etc have also set up their warehousing base in Chennai. Attracting PE investments, the city is fast emerging as the hub for warehousing. Rapid infrastructure development has led to growth of residential belts along the Old Mahabalipuram Road (Siruseri, Shollinganallur, Thoraipakkam), Grand Southern Trunk Road, Perumbakkam, Porur, and Pallikaranai are among the most preferred micro markets.
The nation’s capital continues attracts a lot of job-seekers from across the states. Although, Delhi is still recovering from the overall slowdown, many micro-markets in Delhi NCR belt are witnessing price corrections. Faced with huge demand for affordable housing, supply for the same has been limited. There has always been a demand-supply mismatch in Delhi with supply in Delhi being low while Noida and Gurugram seem to perform comparatively better. Micro markets that offer mid-segment projects have been performing relatively better than the expensive ones such as Greater Kailash II, Panchsheel Park, and South Extension II. Dwarka (L Zone), Narela micro-markets offer affordable homes with connectivity to the main city.