Home Business Delhi, Mumbai, Bengaluru have featured to Emerging World Cities group: Report

Delhi, Mumbai, Bengaluru have featured to Emerging World Cities group: Report

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(G.N.S) Dt. 25

New Delhi

For the first time after years of no show on the global annual survey, three cities from India — Mumbai, Delhi and Bengaluru — have featured among the top world order as a part of the Emerging World Cities group.

A report by JLL, titled World Cities: Mapping the Pathways to Success, shows that among the Emerging World Cities category, Delhi and Mumbai have been deemed Megahubs, while Bengaluru is high Enterprisers city.

Large cities in emerging economies, or Megahubs, are junctions for globalisation of national economies, and are capable centres of business and retail, but fail to punch above their weight as investment destinations.

Enterprisers are home to some of the world’s most dynamic real estate markets. These emerging economies possess rapidly evolving innovation systems and are increasingly becoming home to their own successful, home-grown multi-national corporations.

The annual global survey is published in conjunction with The Business of Cities. The report maps top business destinations across the world, categorising them into various groups to understand the investor and development sentiments and potential for business growth, to evaluate their strengths and opportunities for real estate investors, developers and corporate occupiers. Over 80 cities globally are considered for evaluation for this report and slotted into four categories and ten sub categories.

Mumbai has been a gateway city for most international corporations looking to set up shop in the country. The city enjoys a strong presence of global BFSI, retail as well as institutional investment companies. The capital of Maharashtra has an estimated GDP of USD 310 billion and has 28 billionaires living in it.

Mumbai’s office market has seen a rise in supply and absorption and today has the highest volume of Grade-A office space, estimated at approximately 111 million square feet (msf) with a total vacancy of around 16 percent. The market has seen as steady momentum of leasing over the last few quarters. The city is further made attractive to occupiers, as rents have remained steady with softening bias, keeping overall interest high.

From an investment perspective, Mumbai has been India’s top destination for private equity investments with the market attracting nearly USD 10 billion in the period 2014–17.

New Delhi was also featured as a Megahub along with Mumbai, as the city remains an influential office as well as an investment destination. Delhi has seen a growth in building and construction, taking the current Grade-A stock of office supplies to over 100 msf. However, the city has a moderately high vacancy at 30 percent, mostly on account of futuristic developments. The investment market has been strong too with private equity investments of over USD 8 billion in the period of 2014–17.

Bengaluru has an estimated GDP of USD 110 billion and is India’s deemed IT hub. A very busy office transaction market, Bengaluru sees the highest  volume of net absorption year–on–year. Of late, the city has been facing a challenge of low construction momentum, which has significantly brought down vacancy in the city to a mere 3 perceent over a Grade-A office stock of approximately 107 msf.

“While we have seen Indian cities performing better on global platforms, our cities are still far behind when compared to the elite 7 or the contending cities, signalling a much needed shift towards higher productivity and transparency. In order to get there, we must concentrate firstly on further improvements in technical and higher education to increase the number of job-ready graduates and secondly, overcoming the issue of sub-optimal use of land in the central areas of major business districts that have the potential to become growth hubs. The reduction of the informal economy, tackling unsustainable patterns of sprawl and retrofitting of resilient infrastructure are also important to maintain a strong growth profile that will further push our cities towards the top global order,” says Ramesh Nair, CEO & Country Head, JLL India.

“Indian government’s effort to open up the economy to attract foreign companies and capital into India has been seeing a strong positive response. These top three cities have been the hotbed of commercial activities and have a positive growth outlook as indicated by the fact that over 70% of the total investments through PE have been in these three cities. However, for Indian cities to reach the top position, some high weightage factors like investment, financial and business activities, and infrastructure should be improved to favourably impact global economic indices like GDP per capita, economic growth rates, industrial structure etc. and rise in global ranking,” added Nair.

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