Indian cities occupy every one of the top 10 spots on a recent list of the world’s fastest-growing cities over the next two decades, according to the Indian Embassy in Seoul, citing a report from Oxford Economics.

Surat, a diamond-processing and trading center in the western state of Gujarat, will see the fastest expansion through 2035, averaging more than 9 percent growth annually. As one of a handful of smart cities developed by the Indian government and the private sector, Surat is followed on the list by Agra, Bengaluru, Hyderabad, Nagpur, Tiruppur, Rajkot, Tiruchirappalli, Chennai and Vijayawada.

While the individual economic output of these cities won’t rival that of the world’s biggest metropolises, the combined gross domestic product of all Asian cities will exceed that of all North American and European cities by 2027, the report forecast.

The surge in Indian cities’ economic output is reflected in soaring institutional investment in India’s real estate market, which reached $5.5 billion last year, the highest level over the past decade.

According to the Economic Times, an English daily newspaper in India, the country’s real estate sector has emerged as one of the most favored investment destinations for institutional investors over the past decade, with a significant increase following the global financial crisis that erupted in late 2008. While the sector attracted $30 billion worth of institutional investment between 2008 and 2018, over $20 billion flowed in between 2014 and 2018 on the back of reforms, JLL India reported.

Factors driving the growth in investment include policy reform, stable macroeconomic fundamentals and increased risk-taking on the part of foreign and domestic institutional investors. A number of reforms targeting the real estate market have resulted in a change in global investors’ perception of Indian real estate, the report said.

By Joel Lee (joel@heraldcorp.com)