Few Cities Doing Well In Terms Of Attracting Investors In India: Realty Market
Housing has always been a preferred investment option not only for individual investors but also for institutional ones. In the past, institutional investors showed a preference for office spaces as against residential 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. Few cities have been doing well in terms of attracting investors in India and certain growth factors contribute to their success.
Residential developers are offered more of debt/structured debt options. With RERA coming into play and emphasis on compliances, 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 corporation. Cities doing well in India are as follows:
Bengaluru, India’s Silicon Valley, has outperformed other markets in the country despite the lull in the IT sector. The demand for office space and commercial establishment continues to grow. The ready-to-move-in stock has seen the highest absorption. Housing needs of people who are preferring to stay close to their workplace have given a big boost to the residential projects around IT and commercial developments. Availability of large land parcels is perfect for the increased affordable housing sector demand.
Mumbai is the financial capital of India and continues to attract investors for residential and commercial spaces. 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. Navi Mumbai is already witnessing increased demand due to the proposed airport. Due to the lower cost of operations, many IT companies have been shifting to places like Vashi and Airoli in Navi Mumbai.
Migrant employees and student demand for housing have made 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. Hyderabad is set for a major transformation due to fast-paced infrastructural developments like strategic road development plan, construction of four major flyovers and three corridor elevated metro line of the Mega Hyderabad Metro project. Top micro-markets in Hyderabad include Hitech City, Gachibowli, Jubilee Hills, Banjara Hills, Panjagutta, Begumpet and Himayath Nagar while the upcoming IT/ITES/residential markets are Rajendra Nagar, Kokapet, and Manikonda.
In Chennai, rapid infrastructure development has led to the 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.
Delhi continues to attract migrant 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.
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