The report adds that heightened infrastructure development, quality workforce, growth of the IT/ ITES sectors and growing local industries are the key factors that have made these cities attractive for investors. Land has emerged as the most preferred and attractive choice for investment among all verticals for funds. This is followed by integrated townships, residential and office spaces, which too are popular among the funds.

Millennium Spire managing director Ashish Bhalla observed, “Land is a sought-after investment because it gives better returns.” The company, domiciled in Singapore, has invested in two properties in Delhi NCR and one in Coimbatore. “This will impact the pricing of land in the area. As funds have money to buy large amounts of land, this will lead to price escalation,” he adds.

The report mentions that the majority of funds surveyed have indicated that the potential internal rate of return (IRR) scenario would remain in the 20-25 per cent range, given the current market conditions and expected market dynamics. Both Bhalla and Singh agreed that there are developmental risks in Indian real estate. But, added Singh, “To expect an IRR of 20 plus is a normal phenomenon. Ideally, results across the globe are like that. Therefore something above 20 and till 30 per cent is a fair return.”

Money Pullers

TIER-I

•Mumbai, Chennai, Bangalore, Delhi-NCR, Hyderabad

TIER-II

•Kolkata, Pune, Ahmedabad, Chandigarh, Kochi

TIER-III

•Nagpur, Mysore, Nashik, Coimbatore, Vizag, Indore, Goa, Bhubneshwar, Ludhiana, Lucknow, Jaipur, Dehradun, Jalandhar, Bhopal Cities in order of ranks in the survey