Investment in real estate can give upto 145% returns: Survey
Mumbai: The real estate sector will continue to remain an attractive investment destination with the possibility of prices in residential areas appreciating by 91 to 145 percent in select cities over the next five years, a survey released Tuesday said.
In a first of its kind report prepared by Knight Frank, a real estate advisory firm, high possible return on investments ranging between 18.6 percent and 29 percent per annum over the next five years will emerge as a key driver for investors' interest in the sector.
The report highlights that despite the slump in the real estate market, Mumbai will continue to be the most promising investment destination followed by Delhi-NCR, Chennai, Pune and Bengaluru, Knight Frank Executive Director (retail, advisory and hospitality) Gulam Zia told reporters here Tuesday.
The study has identified 13 destinations across these five cities where prices are expected to appreciate in the range of 91-145 percent over the next five years, he said.
"With property options ranging from Rs 3,200- Rs 15,000 per sq ft and price appreciation in the range of 91 percent to 145 percent, residential real estate will emerge as a promising asset class for the next five years," he said.
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, Zia said.
According to the survey, performance of IT and ITeS industry will have a major bearing on the real estate market in cities like Bengaluru, Chennai and Pune.
Ulwe, Wadala and Chembur in Mumbai will witness price appreciation of 145 percent, 133 percent and 125 percent respectively in five years, the report said.
Noida Extension and Dwarka Expressway in Delhi-NCR will see an appreciation of 111 percent and 108 percent respectively over the period.
In Chennai's Medavakkam, prices are expected to appreciate by 103 percent from the current Rs 3800 per sq ft while prices in Pallikarni could rise by 93 percent.
Pune's Hinjewadi, Tathawade, Ravet and Wakad would witness rise in prices by 100 percent, 98 percent, 97 percent and 91 percent respectively mainly due to the IT and ITeS sectors.
Hebbal and KR Puram in Bengaluru will see an increase in prices by 94 percent and 91 percent respectively, the report said.
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