Hyderabad sees 35% fall in real estate investments

Hyderabad: If we take the flow of new investments as the sign of recovery in the Hyderabad real estate market, the City of Pearls lags behind by miles. For, the new investments into the city had fallen by a significant 35 per cent during 12 months to June 2017, according to a recent global report by Cushman & Wakefield, a global real estate services company.

The report estimated that Hyderabad received a total of $30 million (`193 crore) in property investments in 12 months from July 2016 to June 2017. It was 35 per cent less than what the city got in preceding year i.e. July 2015 to June 2016. However, the city has Chennai for company because the Tamil Nadu’s capital saw much higher fall of 57 per cent in the real estate investments to $118 million (Rs 762 crore) in the same period. It however did not spell out the reasons for the decline in investments in Hyderabad and Chennai.

But other Indian cities figured in the worldwide report fared extremely well during the same period. Mumbai, the country’s commercial capital, saw 195 per cent jump in realty investment to $1,749 million (nearly Rs 11,295 crore) while Bengaluru registered 54 per cent upswing to $461 million (Rs 2,977 crore). New Delhi received $181 million (Rs 1,170 crore), recording a growth of 45 per cent.

However, Pune outshone all the cities by posting a growth of whopping 285 per cent in real estate investments to $336 million (Rs 2,170 crore). Thanks to the phenomenal growth in Mumbai and Pune, India registered 100 per cent upswing in the investments to $2.87 billion (Rs 18,535 crore) during the period under review. However, nearly 75 per cent of the investment came in through cross-border route.

“The report may be true because unlike Mumbai and Bengaluru, Hyderabad is not a popular destination for overseas investments in realty sector. Besides, there is adverse impact of demonetisation. But we have a good number of new launches in commercial as well as residential space. In addition, our sales are also good,” C Shekar Reddy, former national president of realty body Credai, told The Hans India.

For the worldwide study titled ‘Winning in Growth Cities’, Cushman & Wakefield carried out detailed survey in 400 cities worldwide. New York city topped the list with $51 billion in property investments, but saw the flow decline by 37.2 per cent during the year. Mumbai is the only Indian city in top 100 with 81 rank. The global property investment market saw volumes rise four per cent to $1.5 trillion in the period.

The report said that emerging markets were performing ahead of expectations. “Current economic drivers are biased towards developed markets, but many emerging markets…clearly offer superior medium to long term growth potential in real estate,” it said. On India, it said that time was ripe for the country to be included in the global growth portfolio. “Leading cities to consider are Mumbai, Delhi and Bengaluru, but tier 2 cities such as Pune, Hyderabad and Chennai should be on the radar,” it added.

The report described Hyderabad, which was ranked at 302 among 400 cities, as one of leading startup cities. “Cities such as Chennai, Hyderabad and Pune typically offer a safer and better standard of living than other Indian cities, albeit with differing costs of living and economic strong points, with Pune a university town, Chennai strong for automotive and Hyderabad one of India’s leading start-up cities,” it said.

By P Madhusudhan Reddy