Chennai is emerging as the hottest new destination for property investors not just in India but the Asia-Pacific region, according to a new report by Cushman & Wakefield named ‘Betting on Asia Pacific’s Next Core Cities.’
Chennai featured among the top Indian cities in this report, jostling with cities like Bangkok, Manila, and Shenzhen.
Over the past six months, many Indian cities have witnessed a decline in prices and new project launches due to sluggish sales, which, in turn, has led to apartments and houses piling up extra inventory. Cushman & Wakefield notes that the real estate market in cities such as Mumbai and Bangalore has witnessed a steady quarter-on-quarter slide since last year and also due to demonetization.
This is a field ripe for picking for value investors frustrated by the fast depletion of investment-grade assets. Faced with acute shortages in Asia’s prime markets, investors are now turning their focus to second and third tier markets. Indian markets offer huge potential for such investors looking for long-term growth. Says Siddharth Goel, Senior Director, Research Services, Cushman & Wakefield, “Asia Pacific remains a viable investment target for global capital…The country is firmly on track to become an economic powerhouse with strengthening GDP, better business environment, and investor-friendly policies by the Central government.” Goel notes that it is commercial properties that are most in demand as India has seen a surge in sectors like healthcare, consulting, and manufacturing.
According to Cushman & Wakefield’s Atlas Summary Report 2017, the Asia Pacific real estate sector is looking highly positive with investment volumes pegged to hit US$611 billion this year. Significant development in infrastructure, the unprecedented growth of Chinese capital, and the introduction of legislation favouring investors are among the many factors that are expected to drive property investment. India has seen a huge demand for industrial parks, business centres, and warehousing centres with the economy growing at a steady pace. Along with the introduction of GST, RERA, and the introduction of policies promoting international partnerships, FDI and private investments, commercial real estate is on the cusp of tremendous change.
With the Tamil Nadu government recently slashing the guideline value of land by 33%, Chennai has witnessed a significant impact on property prices. Global investors looking to establish a presence in India would find Chennai a prime market for commercial property investment. Chennai, along with Hyderabad and Bangalore, has become one of the preferred destinations for private equity investors looking to sink funds into the real estate sector, as well.
The city’s already flourishing IT and healthcare sectors have attracted many international companies to its shores. Chennai could be the next hottest destination for corporates and individual homebuyers alike.
