PwC Ireland’s breakfast briefing on India Real Estate, held this morning, was told that New Delhi, India, offers solid development and investment opportunities. This was a finding of Emerging Trends in Real Estate Asia Pacific 2007, published by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC). This finding is in tandem with PwC Ireland’s 2007 CEO Pulse Survey which showed 9% of Irish indigenous CEOs expecting to invest in India compared to 2% last year. Overall, nearly a quarter (21%) of Irish indigenous CEOs said that they would invest in Asia compared to 12% last year.
Amongst Asia Pacific cities, New Delhi ranks as the best market for purchasing hotel and resort properties. Emerging Trends notes that housing demand is rising in many emerging markets in Asia, due to rapid urbanisation, rising incomes and a growing middle class. However, it adds, there is considerable need for consumer education and cultural adaptations in these markets. New Delhi is one of the cities in Asia Pacific listed as a top market for apartments and residential properties.
Enda Faughnan, Partner, Real Estate Group, PwC Ireland said:
“There are significant opportunities for Irish investors and property developers in New Dehli, India and Asia Pacific generally. However, before making any decision to invest careful consideration must be given to the tax, regulatory and local legal issues. This includes planning for exit strategies including flexible extraction of profits with minimal local taxes. But most of all, it is critical that the right structure is put in place from day one to ensure no unnecessary tax leakage and optimum long term returns are achieved”.
Speaking at PwC Ireland’s India Real Estate breakfast, Rajiv Anand, PwC New Delhi added:
“Excluding the industrial/distribution sector there is a consistent theme to buy in New Delhi. New Delhi’s development rating is respectable compared to that of other Asia Pacific cities and the city ranks the highest among 19 Asia Pacific cities for the hotel/resort buy category. The expected increase in tourism and business travel, in addition to large-scale development plans associated with hosting the 2010 Commonwealth Games means that there is cautious optimism for the New Delhi real estate market”.
The report cites that assessing investment risk for individual projects in Asia Pacific is challenging, due to the huge diversity across the region particularly in terms of market maturity, economic development, cultural background and Government openness to foreign capital. Risks include those associated with property title documentation, market transparency, rigid Government regulations, and exit strategies. However, despite these risks, with careful planning the future looks bright for 2007 for New Dehli and Indian real estate generally.
The report further cited Osaka, Shanghai and Tokyo as the top Asia Pacific cities in terms of real estate investment and development prospects. Rising investor enthusiasm and demand for property in Osaka and Tokyo is indicative of the upturn in Japan’s economy. A mixture of strong economic growth, an end to deflation and the fact that by Japanese standards, its markets are coming off a very low base has boosted investor interest in property assets from Tokyo to Osaka.
Shanghai also scored high with retail being the number one sector here, despite an increasingly strained infrastructure and oversupply of office space. Shanghai’s growing affluence should continue to propel this sector with over seventy percent of survey participants recommending buying retail space in that city.
ENDS
With PwC’s strong network in India and right across Asia Pacific, our property professionals and advisors can help support Irish investors when doing business in this important region.
