Foreign capital in Indian realty jumps to $24 bn in 2017-2021: Report
- IBEF
- March 7, 2022
According to a Colliers analysis, in collaboration with FICCI, foreign capital flows in real estate increased threefold to US$ 24 billion during the previous five years. Global investors have become more interested in investing in Indian real estate in the recent five years, thanks to regulatory improvements implemented in 2016.
The investors have a long-term perspective and a large exposure to development assets, indicating that they are willing to incur construction risks with reputable partners. To establish and acquire long-term sustainable properties, the investors continue to invest with developers that have demonstrated experience in their particular business areas. More structured capital is likely to come into the industry, with residential sales continuing to do well across markets in India and available prospects for developers to grow.
During the period 2017-21, the office sector led the way in terms of foreign investments, accounting for 43% of total foreign investments, followed by the mixed-use industry, which accounted for 18% of total foreign investments. Residential assets accounted for 11% of total foreign investments in 2017-2021, down from 37% in the previous five-year period. Investors will be pushed to build new platforms for development prospects due to a lack of income-producing data centre properties in key regions and the potential for future REIT listings. Global data centre operators, corporations, and investors have committed US$ 13.5 billion in cash to the development of data centres in India during the last five years. Industrial and logistics assets in India have only recently gained traction, owing to strong demand for modern warehousing facilities from E-commerce and 3PL companies. Industrial and logistics assets surpassed the office sector as the main choice for foreign institutional investors in 2021, attracting over a third of foreign investments (US$ 1.1 billion).
Alternative assets saw a US$ 1 billion inflows from 2017- 21, with the majority of it coming during the epidemic years. The government's data localization strategy, as well as the infrastructure status granted to data centres recently, are likely to encourage the building of new data centres in the country.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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