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Mumbai beats bigger office markets like NCR & Bengaluru in expected investor returns on the commercial real estate market

By Religare

The commercial real estate market of Mumbai, the financial capital of India, is still the prime real estate market in the country. Central Mumbai business districts are projected to beat every other business district in the country in terms of net annual returns.

Areas like Lower Parel, Dadar & Prabhadevi in Central Mumbai have emerged as the most attractive investment destinations in India projected to offer a 19 per cent net annual return in the next five years. The region is touted to have a growth in rentals of up to 47 per cent and capital growth of up to 63 per cent in the coming five years.


There are other business districts in Mumbai like the Secondary Business District (SBD) in the West, which too are expected to yield up to 15 per cent return per annum. In comparison, the return on investment in commercial properties in the National Capital Region (NCR) is expected to be around 10 per cent, one of the lowest in the country. In other prominent commercial centers like Hyderabad (SBD) & Pune (SBD East), the return on investment is expected to peak at around 14 per cent per annum.

There are several factors that favor Mumbai's real estate sector when compared to other cities in the country. Prominent ones include conducive business environment, international air connectivity, presence of prominent stock and commodity exchanges along with headquarters of several banks. On the contrary, despite being the largest office markets in the country, NCR & Bengaluru will remain far behind other similar commercial centers in terms of annualized investor returns.

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Story first published: Friday, May 24, 2013, 23:33 [IST]
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