City is a top ranker among Asia Pacific realty hotspots

NEW DELHI: Bangalore, Ho Chi Minh City, and Mumbai are strong development markets while Osaka, Shanghai, and Tokyo are considered top Asia Pacific cities in terms of real estate investment and development prospects. The conclusions, elaborated in a report titled ‘Emerging Trends in Real Estate Asia Pacific 2007’, were published recently by PricewaterhouseCoopers and the Urban Land Institute.

The 19 Asia Pacific cities that figure in the report are divided into five general categories based on their investment and development prospects. The other basis for categorisation is various respondents’ opinion about buying, holding, or selling different property types within each market. See box for details of the categories.

The office sector is ranked highest among the favoured property types in Asia Pacific cities. Singapore is listed as the top city in which to buy office space, followed by Mumbai, Ho Chi Minh City, Tokyo, and Osaka. The second favoured property type is in the hotel and resort sector. New Delhi ranks as the best market for purchasing hotel and resort properties, with Mumbai, Ho Chi Minh City, Beijing, and Taipei trailing. Retail is the third favoured property type and Mumbai, Tokyo, Shanghai, Bangalore, and Osaka are ranked as the top five markets.

While it is observed that US investors are the largest source of Asia Pacific real estate investment capital, the report notes that investment is growing from within the region and from the Middle East as well.

The reports says the current targets for total annual returns range from 12.5 per cent for core investments to nearly 24 per cent for opportunistic investments in the Asia Pacific region.