India remains a favourable destination in the Asia Pacific for investment in commercial real estate market with returns much higher than peers, a global report said.
India remains a favourable destination in the Asia Pacific for investment in commercial real estate market with returns much higher than peers, a global report said. With a cap rate or yield of 8.8 per cent, India offers the highest return potential in the office segment on account of favourable supply situation for investors, Knight Frank report on the commercial assets in the Asia Pacific Capital Markets released Friday said. The cap rate measures the real estate investments that are assessed for their profitability and return potential. In other words, it is the yield of a property measures over a time horizon of more than one year assuming the property is purchased on cash and not on loan.
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“India’s office market offers some of the best returns for investors with over 8% yield, based on the fact that the underlined demand – supply dynamics are favourable for investors. This is demonstrated by the fact that 4 out of 8 office markets have single digit vacancy levels underscoring the strength of this segment,” said Sharad Agrawal, Executive Director – Capital Markets, Knight Frank India. The first half of the running year posted the highest ever office transactions of more than 27 million square feet, it added.
Source: Financial Express
