NINE IN­DIAN CITIES IN JLL’S LAT­EST ‘GLOBAL 300’ RANK­INGS

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A to­tal of nine In­dian cities fig­ure on the lat­est edi­tion of ‘Global 300’ cities – the an­nual JLL rank­ing ex­er­cise, which rep­re­sents 300 ma­jor cities that are the fo­cus of com­mer­cial ac­tiv­ity and in­ter­est, 40 per­cent of the world’s econ­omy, and three-quar­ters of global real es­tate in­vest­ment.

In an ever-chang­ing world, more ur­ban cen­tres in In­dia are rapidly emerg­ing as play­ers on the global stage – mov­ing be­yond the pow­er­houses of Mum­bai, Delhi and Ban­ga­lore. While the megac­i­ties of Delhi and Mum­bai rank in the ‘Global Top 30’ – thanks largely to their huge scale, other cities such as Ban­ga­lore, Chennai and Kolkata sit within the ‘Global Top 100’ – with Hy­der­abad just out­side it. Mum­bai (17th) is among the 20 largest cities in the world by gross do­mes­tic prod­uct (GDP), while Delhi (22nd) sits just out­side of this – with both cities hav­ing a GDP of more than $400 bil­lion. This also makes them the fifth and sixth largest cities in Asia, re­spec­tively, only be­hind Tokyo, Shang­hai, Seoul and Jakarta.

Both the megac­i­ties demon­strate their sheer scale by be­ing larger than the likes of Sin­ga­pore, Hong Kong, Wash­ing­ton and San Fran­cisco. How­ever, in GDP per capita terms, Mum­bai and Delhi lag be­hind their global coun­ter­parts, due to their large pop­u­la­tions. While both In­dian megac­i­ties sig­nif­i­cantly lag be­hind Shang­hai, Bei­jing and Seoul, even the Amer­i­can cities and Sin­ga­pore have per capita in­comes that are three to four times larger.

In terms of cor­po­rate pres­ence, Mum­bai comes ahead of San Fran­cisco, Shang­hai, Syd­ney, Sin­ga­pore, Wash­ing­ton, At­lanta, Toronto etc. Delhi, too, is ahead of cities like Guangzhou and Frank­furt. Cor­po­rate pres­ence is based purely on num­ber of head­quar­ters of the Forbes 2000 list. The scale of the In­dian mar­ket means that 38 com­pa­nies – based in ei­ther Delhi (14) or Mum­bai (24) – make the list from In­dia’s largest IT firms, banks and en­ergy firms. This does not ac­count for regional or sec­ondary of­fices of global firms, which may help ac­count for Mum­bai and Delhi’s high po­si­tions.

Al­though some at­ten­tion is start­ing to turn to the coun­try, In­dia’s cities are not large re­cip­i­ents of di­rect real es­tate in­vest­ment – given the dif­fi­cul­ties in ac­cess­ing stock and mar­ket trans­parency. Mum­bai sees sim­i­lar in­vest­ment vol­umes to cities such as Guangzhou and Mex­ico City – but just 5 per­cent of those seen in Shang­hai (USD 37 bil­lion) and 10 per­cent of those seen in Bei­jing (USD 18 bil­lion). Over the past three years, Mum­bai has at­tracted USD 1.7 bil­lion of real es­tate in­vest­ment, while Delhi has seen USD 0.6 bil­lion. This puts both cities out­side the ‘Global Top 100’ real es­tate in­vest­ment des­ti­na­tions, de­spite their scale.

Th­ese mar­kets are dom­i­nated by do­mes­tic play­ers, rather than in­ter­na­tional in­vestors. Th­ese lower rank­ings sug­gest that, while Mum­bai and Delhi have the scale to match their global coun­ter­parts, they are un­der­per­form­ing in terms of di­rect real es­tate in­vest­ment. It is also in­dica­tive of an his­toric pref­er­ence by in­vestors to look to de­vel­op­ment and debt lend­ing to gain ex­po­sure to real es­tate in the In­dian mar­ket.

How­ever, a num­ber of key pol­icy-level changes taken by the Gov­ern­ment in re­cent times such as RERA, REITs, sim­pli­fi­ca­tion of tax­a­tion, eas­ing of FDI restrictions, are ex­pected to counter this along with com­ple­tion of new high-qual­ity stock by com­mer­cial de­vel­op­ers, which will in­crease the amount of in­vestable as­sets across In­dia, th­ese de­vel­op­ments are en­cour­ag­ing in­creased in­ter­est from in­ter­na­tional in­vestors of the likes of Black­stone, GIC and Brook­field.

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