Gurgaon, 16 December 2015 — The outlook for real estate in the Asia Pacific region remains largely positive heading into 2016, according to Colliers International’s 2016 Property Outlook. According to the forecasts from Colliers International, government policy will continue to drive the behaviour of investors in many markets.
India is cropping up on the radar for investors, in many cases for the first time. That is mainly as a result of its opening up its domestic economy to international capital. Players active in India and China should see their cost of financing decline in 2016. In contrast, with U.S. interest rates set to increase, borrowing costs will decrease in India and China, although landlords should benefit from better yields.
India and China combined will account for around 70% of the huge impending supply of Grade A office space, Colliers India Research predicts, that ~25 million square feet has already hit the market in 2015 and more than 80 million square feet is planned in the next 3 years.
Surabhi Arora, Associate Director, Research at Colliers India adds “Amid general caution and cost cutting among multinational companies, the IT/ITeS sector will continue to drive the office leasing in Indian markets in the year ahead. In the residential real estate, the affordable and mid segment housing will remain in the lime light. With the government proactively supporting the affordable segment, private players are actively seeking opportunity in this sector”.
E-commerce is reshaping retail and industrial space around Asia and India is no different. Logistics should be one of the most exciting spaces for investment, Colliers anticipates, as capital – once almost exclusively local – starts to cross borders in greater volume. Growth in E-commerce business is resulting in large demand for purpose-built facilities in India.
In the retail segment, mall operators are cautious in adding any new supply, however, Colliers forecasts, since both global and Asian mid-market food & beverage operators are under-represented in the country. This suggests that countires like India can build on the same kind of trends at play in other Asian markets like, Singapore, Hong Kong and Japan, where landlords are creating more “experiential retail,” built around wellness and lifestyle as well as a broader range of dining options.
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