India and China to become main suppliers of office space across Asia-Pacific | 25 September 2013
India and China have been tipped to create the largest supply of office space across Asia-Pacific by 2015, reports business-standard.com.
Knight Frank’s latest Asia Pacific Markets Review is backing both economies to witness between two-four million sq m of supply over the next two years.
Property across Asia-Pacific is said to be in high demand due to its income appeal and hedge against inflation. Knight Frank says prime yields compressed across nearly all markets during the first six months of 2013, while secondary yields maintained their stability.
New Delhi, Mumbai and Bangalore are expected to contribute hugely to the supply, meanwhile Shanghai is thought to have largest market in terms of net absorption over the last decade.
Indiainfoline.com says rents are moving in a sideways pattern and, due to the new supply, should continue along this route.
Although investors are approaching India with caution due to its current account deficit, yields in Delhi, Mumbai and Bangalore are still among the best in the region at around ten per cent.
Rajeev Beirathi, executive director of capital transactions at Knight Frank India, said: “While weak consumer demand, high cost of funds and regulatory hurdles may serve as impediments in the way of investments within the real estate sector, city-level market dynamics will be the ultimate factor determining the way forward.”
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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