Prime Asia Development Land Index introduced by Knight Frank
Knight Frank Asia Pacific has introduced the market’s first-ever Prime Asia Development Land Index which obtains the cost of prime residential and commercial development land in 13 major cities across Asia that consists of cities like NCR, Bengaluru and Mumbai in India.
Key Takeaways
Mumbai
Modification in development rules coupled with increase in prime residential prices resulted in an increment of 35.2 percent in the Prime Residential Development Land in the last 24 months. The land suitable for prime residential development has witnessed unabated interest.
A poor economic situation that resulted in office space absorption combined with large quantum of office supply led to a decrease in the Prime Office Development Land Index by 13.1 percent during the last 24 months.
In 2014, an oppressive office supply pipeline coupled with a little improvement in demand will keep rentals in check. As a result of this, the requirement for prime office land will remain sluggish.
National Capital Region
In last 24 months, the Prime Residential Development Land index for NCR has seen an appreciation of 24.9 percent owing to the increase in prime property prices and steady demand. The Prime Residential Index shows a 13.8 percent increase y-o-y.
Emerging markets of Gurgaon defines a higher rise in Prime Office Land values compared to the developed markets of Connaught Place and Saket. Lack of land in prime locations and consistent demand is expected to push up the rentals and capital values even further.
Bengaluru
Bengaluru’s emergence as a suitable IT destination has resulted in the city growing radially outwards with major arterial roads transforming in to growth corridors. In the last 24 months, the Prime Residential Development Index for Bengaluru has noticed an increase of 26.1 percent owing to the increase in prime property price and constant job growth.
Mr. Rajeev Bairathi, Executive Director, Capital Transactions, Knight Frank India, says that land is the most important raw material for any real estate development. They expect this Index to be a useful tool for Developers and for the complete real estate industry. The index will help to develop the trend in the movement of land prices in a particular city and also benchmark the key cities in India with each other as well as with other important cities in Asia Pacific.
Dr. Samantak Das, Chief Economist and Director – Research, Knight Frank India, says that Mumbai noticed increase in Prime Residential Development Land compared to National Capital Region and Bengaluru. Bengaluru emerged as the worst performer in the Prime Office Development Land.
Mr. Fali Poncha, Director – Land, Mumbai, says that the population increase and the economic condition have resulted in an increase in demand for housing in Mumbai. The limited availability of land, poor quality infrastructure and regulatory constraints has severely restricted creation of new housing stock, resulting in an ever increasing demand supply gap. This is responsible for rise in land prices.
Source: indiainfoline.com
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