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Indian Commercial Real Estate Property Market - Is it the Next Bubble?

Bank Of America Investment Indian Commercial Real Estate Property Market - Transforming and Growing. Can it sustain this growth? Some insights explored here.

India is a promising investment option for investors. It is a favorable market and Indian property sale market includes everything from lands, land services, commercial real estate to residential property. Invest in commercial offices, hotels, guesthouses, resorts, bungalows, flats, offices, shops, industrial premises, malls and more, in any part of the country. Or if you are looking at investing in lands, you can invest in commercial land, agricultural land, land for schools, hospitals or resorts, land for houses, shopping malls and more.

Investment Opportunity The Macro Commercial Property Barometer continues its positive trend. The Barometer, which gauges macro economic conditions and their impact on commercial property investment, has been positive since last year on both the quarterly and annual basis.

New Delhi, June 28, 2006 Recently, 'Aaj Tak', a prime news channel, aired a program called 'Biz Today' that drew a comparison between Indian Real Estate Investment and Real Estate Investment in the UK. The episode called "Ek Ashiana London Mein", which translates as 'A home in England', opener for the Indian investors. The report on Aaj Tak showcased UKLI Real Estate Private Limited, the official referral agents for UKLI Limited (UK), as the sole land investment company in India that offers a unique opportunity to its Indian clientele to expand their investment portfolio overseas.

Banc Of America Investment Regarding the outlook, factors that are expected to positively impact commercial property investments include benign broad inflation, soaring stock markets, positive economic growth, a satisfactory building inflation range, somewhat stable political scenario, and resulting business confidence. Factors that may negatively impact the sector include high levels of development activity, an up tick in bond yields as well as the prime interest rate, a slightly weakening of the exchange rate, and a lower level of consumer confidence.

Investors are showing a continued willingness to buy new commercial space, especially prime location, investment grade properties. Good returns are keeping investors interested. Overall, commercial property capital values grew 12.2% last year and 11.6% in 2004, due to rising foreign investor and pension fund demand. Further investment in the sector is expected in the run up to 6 April when the rules change for including commercial property in a Self Invested Personal Pensions (SIPPs). 2007 will see further interest with the advent of UK Real Estate Investment Trusts (REITS).

Banking Investment Aside from issues around market conditions and structural adjustments, which by in large remain in favour for the sector in the medium term, the barometer suggests that the broad macro fundamentals will continue to support commercial property.

Real estate analysts believe that these discounts are just the first step towards a more visible price correction, so if you have been feeling priced out of the Indian real estate market and you have a fairly long investment horizon, you might want to keep an eye on the developments in the Indian Real Estate sector for the next few months which may offer you the chance to buy a property at a discounted price in a premier city.

Investment Solution Strategic Direct commercial property is considered to have some upside, if not because of solid fundamentals driving income and capital growth, then for reasons related to globalization where Indian property is expected to take a greater cue from the international investment markets, leading to both lower direct capitalization rates and listed property yields.

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Investment Banking Services Of course India does represent a slightly different risk profile and our property inflation and escalation parameters are still adapting, so it is not a foregone conclusion that we can brazenly compare our market to that of the premier developed economies. Nevertheless this is food for thought and suggests that there may well be scope for further structural adjustments to property yields and therefore capital growth. Various feature stories that we carry further below, provide insight into why yields are dropping and why this is a good thing.

Bank Investment Keep reading for more insights and analysis or Commercial Real Estate Property Market of India.

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