MUMBAI: Ulwe in Navi Mumbai, Wadala and Chembur are expected to generate the highest returns for residential real estate investors over the next five years, a report by property firm Knight Frank has revealed.
In fact, seven of the top 9 spots on the list of 13 areas are occupied by localities in Mumbai and Pune. While rates in Ulwe are expected to rise 145% in five years, in Wadala and Chembur, the hike is likely to be 133% and 125%, respectively.
The report seeks to identify areas that will develop because of factors such as job creation, infrastructure development and lifestyle change. "We identified 100 cities using banking penetration, hotel room demand, and air passenger traffic as surrogates for business activities. For infrastructure development, the current and proposed investment in infrastructure were taken as proxies," said Samantak Das, director, Kinght Frank.
Based on the study, Mumbai, Delhi, Bangalore, Chennai and Pune emerged as the top five cities within which the firm decided to identify investment opportunities.
"This is why we have not listed out cities like Hyderabad which fall outside the top five," Das said.
From the five cities, Knight Frank has listed 13 zones which are expected to appreciate by over 90% in the next five years. Of the 13, the top three areas are in Mumbai. They are followed by Noida Extension and Dwarka Expressway in the National Capital Region (NCR), Medavakkam in Chennai and Hinjewadi in Pune.
The cheapest areas identified by the study are Noida Extension in NCR and K R Puram in Bangalore, where prices range around Rs 3,200 to Rs 3,245/square foot. At the other end are Wadala and Chembur, where market prices reign in the region of Rs 12,000 to Rs 15,000/sq ft.
In terms of infrastructure, Ulwe is expected to gain because of new projects, which include suburban rail connectivity, the trans-harbour creek bridge and the proposed Navi Mumbai airport. Although there has been a spate of title disputes in Ulwe in the past, lenders say Cidco has become more discerning and there are now projects with clear title where big names such as HDFC are willing to lend. Wadala prices are expected to rise as the area gets re-rated following lifestyle changes that are taking place as very large projects come up. "Link road in Malad has already witnessed a lifestyle shift which has resulted in prices there rising faster. Wadala, too, is undergoing a lifestyle shift," Das said. Chembur is expected to benefit from the completion of the Santa Cruz-Chembur link road, the Eastern Express Freeway and the monorail.
According to Das, the Planning Commission's projection of a housing shortage of 26 million units does not reflect the demand for housing but the need. Employment generation will translate that need into demand by increasing affordability, he said, adding, "Our research is targeted at the end-user and not those who are looking at property for self occupation. We have projected the appreciation net of transaction costs but have not taken into account either the rental income or expenses for maintaining the property. In any case, the rental income will only be around 2%."
The report has generated the forecast using a benchmark location in the same region which has saturated in terms of real estate growth and infrastructure development, and is considered the most sought after residential market within the zone. "In the case of Navi Mumbai, the IT and IT-enabled services industry will drive employment generation, while in Wadala we expect it to be jobs in banking, finance and insurance that will generate housing demand," he said.
In fact, seven of the top 9 spots on the list of 13 areas are occupied by localities in Mumbai and Pune. While rates in Ulwe are expected to rise 145% in five years, in Wadala and Chembur, the hike is likely to be 133% and 125%, respectively.
The report seeks to identify areas that will develop because of factors such as job creation, infrastructure development and lifestyle change. "We identified 100 cities using banking penetration, hotel room demand, and air passenger traffic as surrogates for business activities. For infrastructure development, the current and proposed investment in infrastructure were taken as proxies," said Samantak Das, director, Kinght Frank.
Based on the study, Mumbai, Delhi, Bangalore, Chennai and Pune emerged as the top five cities within which the firm decided to identify investment opportunities.
"This is why we have not listed out cities like Hyderabad which fall outside the top five," Das said.
From the five cities, Knight Frank has listed 13 zones which are expected to appreciate by over 90% in the next five years. Of the 13, the top three areas are in Mumbai. They are followed by Noida Extension and Dwarka Expressway in the National Capital Region (NCR), Medavakkam in Chennai and Hinjewadi in Pune.
The cheapest areas identified by the study are Noida Extension in NCR and K R Puram in Bangalore, where prices range around Rs 3,200 to Rs 3,245/square foot. At the other end are Wadala and Chembur, where market prices reign in the region of Rs 12,000 to Rs 15,000/sq ft.
In terms of infrastructure, Ulwe is expected to gain because of new projects, which include suburban rail connectivity, the trans-harbour creek bridge and the proposed Navi Mumbai airport. Although there has been a spate of title disputes in Ulwe in the past, lenders say Cidco has become more discerning and there are now projects with clear title where big names such as HDFC are willing to lend. Wadala prices are expected to rise as the area gets re-rated following lifestyle changes that are taking place as very large projects come up. "Link road in Malad has already witnessed a lifestyle shift which has resulted in prices there rising faster. Wadala, too, is undergoing a lifestyle shift," Das said. Chembur is expected to benefit from the completion of the Santa Cruz-Chembur link road, the Eastern Express Freeway and the monorail.
According to Das, the Planning Commission's projection of a housing shortage of 26 million units does not reflect the demand for housing but the need. Employment generation will translate that need into demand by increasing affordability, he said, adding, "Our research is targeted at the end-user and not those who are looking at property for self occupation. We have projected the appreciation net of transaction costs but have not taken into account either the rental income or expenses for maintaining the property. In any case, the rental income will only be around 2%."
The report has generated the forecast using a benchmark location in the same region which has saturated in terms of real estate growth and infrastructure development, and is considered the most sought after residential market within the zone. "In the case of Navi Mumbai, the IT and IT-enabled services industry will drive employment generation, while in Wadala we expect it to be jobs in banking, finance and insurance that will generate housing demand," he said.
‘Mumbai’s Wadala, Chembur best for realty investments’
Mumbai: Mumbai’s Wadala and Chembur suburbs and
Ulwe in Navi Mumbai are India’s top residential locations to invest in,
with property prices in these areas forecast to increase by 133%, 125%
and 145%, respectively, in five years, says Knight Frank India.
The property consultant identified 13 locations across
Mumbai, the national capital region (NCR), Bangalore, Chennai and Pune
as the top investment areas in the country.
With property prices ranging from Rs.3,200 a sq. ft to Rs.15,000
a sq. ft, and price appreciation expected in the range of 91-145%,
residential real estate will emerge as a promising asset class for the
next five years, Knight Frank said in a report released on Tuesday.
India’s western region has the highest number of
promising residential investment options with three destinations in
Mumbai and four in Pune, according to the report.
The performance of India’s information technology
industry will have a major bearing on the realty markets of cities such
as Bangalore, Chennai and Pune, it said.
“Our research has indicated that the direction of
movement of employment and infrastructure development within a city
determines the growth of its real estate market,” said Samantak Das,
director, research and advisory services, Knight Frank India.
Knight Frank said its report is based on an assessment of
real estate drivers such as employment, physical infrastructure,
connectivity to important locations, access to social infrastructure and
land availability, among others.
As for locations in Mumbai, Das said “the city’s real
estate market would grow in the north-east direction and as a result we
expect Ulwe, Chembur and Wadala to be the biggest beneficiaries of this
growth. The price appreciation in these destinations would far exceed
the appreciation in any other region in the country.”
Wadala and Chembur will benefit from their proximity to
premium office markets and upcoming infrastructure projects like the
monorail and the eastern freeway project, while Ulwe will gain from the
proposed Seawood-Uran suburban rail network, the report said.
Mumbai city will witness rapid commercial activity that
will result in a 63% increase in occupied office stock in the next five
years, it added.
NCR, the biggest residential market in the country, is a
rung behind Mumbai in terms of India’s top residential locations to
invest in, with Noida Extension and Dwarka Expressway taking the fourth
and fifth spots, respectively.
According to the Knight Frank report, of the 518,200
residential units launched in NCR from 2007 to 2012, 145,395 are in
Noida and 119,404 in Gurgaon. Prices in Noida Extension are expected to
appreciate by 111% to Rs.6,760 a sq. ft by 2017 from the current price of Rs.3,200 per sq.ft.
Knight Frank identified five other locations that it
expects to gather momentum beyond 2017: Yelahanka in Bangalore, Neemrana
in north-eastern Rajasthan, Narela in north-west Delhi, Manesar in
south Gurgaon, and Ranjanpada in Navi Mumbai.
Ulwe is top realty investment destination
New Delhi
Ulwe in Mumbai has emerged as the country's top
destination for investment in the residential real estate where housing
prices are expected to jump by 145 per cent over the next five years,
according to a report by global property consultant Knight Frank.
Wadala and Chembur in Mumbai are at second and third positions in the
list of 13-top residential destinations from an investment point of
view, with price appreciation of 133 per cent and 125 per cent,
respectively, during 2012-2017.
In Delhi-NCR region, the consultant said Noida Extension and
Dwarka Expressway are the best locations to invest where housing prices
are expected to rise by 111 per cent and 108 per cent, respectively, by
2017. Noida Extension and Dwarka Expressway are ranked 4th and 5th in
the list.
Medavakkam (Chennai) ranks 6th with price appreciation of 103 per
cent, followed by Hinjewadi (Pune) 100 per cent, Tathawade (Pune) 98
per cent, Ravet (Pune) 97 per cent, Hebbal (Bangalore) 94 per cent,
Pallikarnai (Chennai) 93 per cent, Wakad (Pune) 91 per cent and KR Puram
(Bangalore) 91 per cent.
Out of these 13 destinations, housing prices will double fastest
at Ulwe (Mumbai) in 3.4 years ad slowest at KR Puram (Bangalore) in 5.5
years.
In its report 'India's Top Residential Destinations To Invest
In', Knight Frank has identified 13 destinations in the country spread
across Mumbai, Delhi-NCR, Bengaluru, Chennai and Pune. The report
addresses the need of the house buyer from an investment point of view
in the next five years.
"Notwithstanding the slump in the real estate market, the report
unravels destinations like Ulwe in Mums as the most promising investment
destination with estimated price appreciation of 145 per cent," Knight
Frank said.
Ulwe will immensely benefit by the upcoming Seawood-Uran suburban
rail network, which shall connect it to the prominent office hubs
through a mass rapid transport system, it added.
With property options ranging from Rs 3,200 per sq ft to Rs
15,000 per sq ft and price appreciation in the range of 91 per cent to
145 per cent, residential real estate will emerge as promising asset
class for the next five years.
The western region has the highest number of promising
residential investment options with three destinations from Mumbai and
four destinations from Pune, the report said.
The performance of IT/ITeS industry will have a major bearing on
the real estate markets of cities like Bengaluru, Chennai and Pune, it
added.
Commenting on the report, Knight Frank's Executive
Director- Retail, Advisory & Hospitality Gulam Zia said: "With
property options ranging from 3,200/sq ft to 15,000/sq ft and investor
returns in the range of 18.6 per cent - 29 per cent pa residential real
estate will emerge as a promising asset class for the next 5 years". -ExpressIndia
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