Investment Inflows into Real Estate Sector Up 14% YoY
Institutional investments into Indian real estate sector touched $2.6 billion during H1 2022, a 14 percent rise compared to the same period last year. These inflows were led by the office sector, which accounted for about 48 percent share, followed by the retail sector with a share of 19 percent, said a report by Colliers India on July 8. On a quarterly basis, inflows into Q2 2022 have increased from the preceding quarter, while registering a 50 percent increase from the average quarterly inflows of 2021, said the Colliers India report. Delhi NCR saw the highest share of inflows at 35 percent, followed by Mumbai with 11 percent share and Chennai with 10 percent. However, multi-city deals continued to be on the rise, with a 43 percent in investments during H1 2022. These deals were entity-led for assets across multiple cities. Investments in India continue to increase in both development and operating assets. With the current business environment, India will benefit the most from the Asian economies with increased capital inflows. The Indian real estate market is likely to witness both equity and credit inflows tapped by existing and newer Investment Management platforms, he said. Interestingly, domestic investors are back in the market with a 38 percent share in H1 2022, a massive jump from just 13 percent share in H1 2021. Domestic investors were majorly inclined towards mixed-use assets and the retail sector. However, investments continued to be driven by foreign investors wherein pension and sovereign funds are betting on income-yielding assets in the office, retail and industrial sectors. Office sector continues to rule inflows with a 48 percent share in H1 2022 During H1 2022, the office sector garnered about 48 percent of the investments. Investors are seeing encouraging signs of revival in the office sector since late last year, said the report. While a hybrid style of work is the dominant mode of working, large technology corporates continue to lap up office spaces. Investors are taking a medium to a long view of the sector, with the intention of bundling assets into REITs. As a result, investments in the office sector rose 20 percent YoY in H1 2022. During H1 2022, the retail sector saw a 19 percent share in investments as investors look toward completed malls as an investment avenue. India’s retail market is seeing an expansion of fashion and F&B brands. Also, malls have been seeing a healthy pick-up in footfalls since last year. The industrial & logistics sector and the residential sector saw subdued inflows during H1 2022. Investments in alternate assets up 53 percent Investments inflows into alternate assets rose 53 percent YoY during H1 2022 to about $370 million, indicating that investors are betting big on diversifying their portfolios. Deals during this period ranged from data centers, holiday homes and life sciences, according to the report. During H1 2022, inflows in alternate assets accounted for 14 percent of total investments. The next few quarters will see some greenfield investments, especially in the office and industrial & logistics sector,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
Tags : Investment Inflows Real Estate Sector Vimal Nadar Senior Director and Head of Research Colliers India Delhi NCR