« Back to articlePrint this article

Three Indian cities in top global real estate list

June 03, 2003 16:44 IST

Delhi, Mumbai and Bangalore were among the top 24 cities in the world with the potential to attract international real estate occupiers and investors, a global research conducted by real estate consultants Jones Lang LaSalle and LaSalle Investment Management said.

"These are the cities across the globe that have the ingredients of success and hold great potential to propel themselves to the 'world city' status," the research pointed out. Eight Chinese cities, including Beijing, Shanghai and Shenzhen, also made it to the list.

While Bangalore was ranked among the top six rising technology cities in the world, Mumbai and Delhi were identified as the rising mega cities.

However, none of the Indian cities had the potential to attract investors based on the unique selling proposition of a clean environment, the study said.

The study identified Helsinki, Austin and Raleigh-Durham as 'technology rich' cities, with a high-value, knowledge-intensive industry linked to a strong research and educational infrastructure.

It said six cities -- Bangalore, Tallinn and Budapest in Central Europe, San Jose in Central America and Dalian and Suzhou in China -- were identified as the rising technology cities.

"Bangalore is moving from an IT back-office location to a full-fledged IT hub, with cutting-edge research combined with low value-added services," the consultant said.

The report said the influx of multinational companies, looking for custom-designed independent campus buildings, would continue to transform the local real estate stock in Bangalore.

It added that the environment for direct investment would improve, leading to an active institutional investment market in the city.

The study also said while the prime office rent in Bangalore was among the lowest in the category at $122 per square metre per annum, the real estate transparency was high.

Mumbai and Delhi, the commercial and administrative capitals of India respectively, were identified as the 'rising mega cities' along with Shanghai, Beijing and Pearl River Delta of China and Santiago in Latin America.

The study said access to a large pool of labour with good technical skills in both these cities had resulted in the establishment of back-office and contact centres.

"Both cities have the potential for high-value activities with a degree of originality in the fields of technology and intellectual research. Nonetheless, the two cities will face increasing competition from India's second-tier cities, including Bangalore, Chennai, Hyderabad and Pune," it said.

The study said the poor quality of real estate in these cities would constrain investment in real estate, but the growth in demand for back-offices and contact centres would result in a strong growth in suburban real estate development and investment opportunities would increase.

The annual per square metre prime office rents at $407 for Mumbai and $288 for Delhi were high compared to the Chinese cities, it added.

The study identified Dubai, Dublin and Las Vegas as the winners of the last decade.

City highlights

Parul Gupta in New Delhi