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Mumbai, Delhi NCR and 6 other cities to remain favoured real estate investment destination in 2013

MUMBAI: 'I want to buy a property this year' is likely to be one of the key resolutions of many Indians in 2013. And, not necessarily for living in that house, but also for investment purposes. After all, property, along with goldand fixed deposits, continues to maintain its stronghold over the average Indian investor's psyche. For many investors, the allure of real estate has not dimmed, despite the slump the sector witnessed in 2012.

"With property options ranging from Rs 3,200-15,000 per sq ft and investor returns in the range of 18.6-29% per annum residential real estate will emerge as a promising asset class for the next 5 years.

From the perspective of return, real estate investment especially in India has garnered superior returns in comparison to other asset classes over a long term. But the truth remains that Investment in real estate is burdened with decisions based on gut feeling and tips which result in poor investments," says Gulam Zia, executive director, retail, advisory and hospitality with property consultancy firm Knight Frank India in its investment advisory report 2012.

Clearly, the tougher part is zeroing in on the right destination, price and project. This is because unlike stocks and mutual funds, whose performance can be easily tracked thanks to published prices and net asset values (NAV), the real estate sector lacks transparency.

Nevertheless, you can always bank on certain parameters to make the right choice. "Identifying the right markets becomes easier if one looks for certain at key market triggers. The critical ones that highlight the potential of any property markets include existing infrastructure readiness, implementation timelines for new infrastructure initiatives, demand for commercial space in the market (leading to job creation), social infrastructure, and price trends," says Om Ahuja, CEO, residential services, Jones Lang LaSalle India.

According to real estate consultants these are the cities and the locations within that will continue to be attractive this year:


According to Knight Frank's investment advisory report 2012, Wadala and Chembur are expected to witness price appreciation of 133% and 125% respectively between 2013 and 2017. The factors in its favour? Strategic location, proximity to premium office markets and upcoming infrastructure projects like Monorail and Eastern Freeway project.


Within Navi Mumbai, localities like Ulwe and Kalamboli look promising. "Ulwe will immensely benefit from the upcoming Seawood-Uran suburban rail network, which will connect it to the prominent office hubs through a mass rapid transport system," notes the Knight Frank report.

Then, there are Kharghar and Panvel. "In Noida and Navi Mumbai, there are market drivers over and above job creation at play - namely superior infrastructure and affordability. Navi Mumbai and Noida are absorbing investor demand from Mumbai and Delhi, where affordability plays important role for investors. In the case of Navi Mumbai, one can further extrapolate the investment potential to Kharghar, Kalamboli and Ulwe," explains Ahuja of JLL.


Knight Frank expects Noida Extension and Dwarka Expressway to consolidate their position as attractive investment destinations. Property rates in Noida Extension could see a 111% price appreciation. JLL, too, places its bets on Noida's extended growth corridors of Noida Extension and Noida Expressway.