Mumbai

The interest in real estate investment seems to be fading with time and unaffordable prices however, Indian High Networth Individuals (HNIs) still get attracted towards buying property in London.

According to a new wealth report unveiled by Knight Frank last week, Mumbai, which is considered to be one of the costliest cities in the world, but it isn’t all what it seems. Monaco tops the list for real estate rates globally, while India’s commercial capital is near the bottom of the pyramid the wealth report findings observe. So, if you are a billionaire contemplating on parking your money in real estate, it is perhaps time to look closer home.

As per this report, a rich Indian can manage to buy 99 sq metre of space in Mumbai for $1 million which keeps it much closer to the bottom of the pyramid. Hong Kong, Singapore, Shanghai, Beijing and Tokyo are the Asian cities that outdo Mumbai in terms of cost.

The top of the pyramid is captured by Monaco, where for $1 million; you can only buy 17 sq metres of space followed by Hong Kong (20), London (22) and New York (27).

The Indian UHNIs (Ultra High Networth Individuals) also prefer to purchase properties in Dubai and Singapore. According to a survey, the latter two cities are expected to surpass the coveted top positions presently enjoyed by London and New York, the report states.

Image Credits: DNA

If you are the one who is cursing the Mumbai city due to lack of space, proper amenities and other shortcomings, so here are some heartening news for you; Mumbai is one among top five emerging world cities. According to the report of JLL, a global property consultant, “Mumbai is 4^th on the list of emerging world cities, however; the top three are Shanghai, Beijing and Dubai. Apart from Mumbai; New Delhi and Bengaluru were also in the report which titled “Globalization and Competition: The New World of Cities”.

In report, According to JLL emerging world cities are the business capitals of major economies as these cities are experiencing higher growth percentage, attention of governance and implementation of strategies to become more stable and establish regions. These cities often get support from the national government, as government is in the process of economic adjustment and busy in the restructuring and optimization of urban and metropolitan regions for the benefits of global engagement. The report explains that Mumbai is witnessing urban consumer demand between now and 2030, along with other regions such as; Jakarta and Istanbul. According to experts, this growth can help the retail sector as demand and supply ratio is different in these cities as per region preferences and requirements.

JLL Report Findings:

According to report, it is expected that 26 percent firms have the revenue of more than $ 1 billion and by the end f 2025 this share could reach 50 percent. However; report, also pointed out that in present real estate market of Mumbai is performing well as it is attracting real estate investment and outsourcing activities, but still at certain points its facing chronic infrastructure supply challenges and these challenges can be hurdle for transnational firms. Apart from that Manila and Jakarta also reported the same issue. In these cities transnational firms are performing well as they are able to expand their operations in South and South East Asia in very low cost with huge market opportunities, whereas; on certain pints they are also facing considerable urban infrastructure shortages.

Recommendations of JLL:

It is recommended to these cities that now its need of time to focus on the other aspects such as; reducing complexity of preparation, assembling and project execution because it could prevent capital investment budgets on a year-by-year basis. However; there are substantial improvements in Mumbai as government has taken steps to improve transparency, reduce red-tapism, and strengthen governance with aim to reduce the complexity in execution of projects. For example; In Mumbai the civic corporation has cut building permissions from 150 to 70 and it also reduced the time limit to give such permissions. Apart from that state government is also working on a plan to digitize permissions which real estate developers need. It is suggested that there is need to address three major issues as it could be hurdle in the growth and success of the cities and these three issues are; how to build and sustain multiple sources of investment, how to attract talent and local skills and co-ordination in metropolitan space.

In the absence of strategies and systems of address these issues, the emerging world cities will struggle and find it difficult to manage their growth effectively in the ratio of economic development.