‘Scandal-hit’ city falls to new low as realty investment hub

Mumbai: The city's rating as a real estate investment destination has taken a further hit, and a "political scandal" is among the factors being blamed for it. Mumbai has dropped from No. 3 in 2011 to 

No. 20 on a list of 22 investment destinations covered by the Emerging Trends in Real Estate Asia Pacific 2013, published by the Urban Land Institute and Price WaterhouseCoopers. The report was released on Tuesday. The city was already down at No. 15 in the 2012 report. 
    The study has attributed Mumbai's low ranking to a "recent political scandal" in the state which, it said, had paralysed development over the past year. It does not name the scandal, but it is believed to be referring to Adarsh, in which government officials, politicians and armymen have found themselves in the dock. 
Washington House is Lodha's for 342cr R ealty company Lodha Developer has finally acquired Washington House, the three-storey residential building owned by the US consulate on Altamont Road, for Rs 341.82 crore. P 2 EMERGING TRENDS REPORT 'Jakarta best city for realty investment' 
Mumbai: Not just "political scandal", Mumbai's fall as a real estate investment destination has been attributed to lack of transparency too. A Price WaterhouseCoopers official said transparency was another reason realty investments in Mumbai had come to a standstill when the BMC overhauled building rules to make them more stringent for unscrupulous developers who used to manipulate habitable and non-livable spaces in their buildings. 
    The Emerging Trends in Real Estate Asia Pacific 2013 report quotes an investor, who said, "In a way, it has been a blessing in disguise as it has allowed the city to work out its oversupply problem." 
    Property valuations in Mumbai are unlikely to rebound until these issues are fully resolved, the report said. According to it, local developers are more "aggressive, and so, more stressed" because they appear willing to borrow money at expensive rates. "Mumbai is likely to be a good destination for opportunistic capital looking to leverage against developer stress,'' the report stated. 
    It's not jut Mumbai that has seen a dip in its ranking. Delhi has slipped from 5th slot in 2011 to No. 21, while Bangalore has 
tumbled from No. 10 in 2011 to No. 19 because of its "over-reliance" on the sluggish global IT industry. 
    According to the study, the top investment markets for 2013 are Jakarta, Shanghai, Singapore, Sydney and Kuala Lumpur. Jakarta has been described as a 'surprising' choice, given the city's lack of investment grade stock and its economy which, while growing, lacks the enterprise, scale and infrastructure of its more developed neighbours. However, it said the city was seen by real estate professionals as the most favourable emerging market in the region with business transactions being simpler and more transparent than in other markets like Vietnam. "Demand for property is strong, resulting in year-to-year office rents leaping by 29%," it said. Jakarta had been ranked a lowly 14th in 2011. 
    For the third year, Shanghai is at the number two position. "However, Shanghai is not as appealing to foreigners today as it was earlier. This is partly because markets have become saturated and Chinese regulators are now not as welcoming as they once were," it said. Although sales have dropped in the commercial sector, the city remains firmly on the radar for domestic buyers and many foreign funds with a mandate to invest in Chinese real estate.