Institutional investment in real estate in June quarter jumps 9-fold to US$ 1.35 billion: JLL

According to JLL India, property consultant, institutional investment in the Indian real estate sector registered a 9X growth to US$ 1.35 billion between April 2021 and June 2021, due to the increasing inflow of funds in the warehousing projects.

JLL India stated in its ‘Capital Markets Update Q2 2021' report that, that institutional investors brought US$ 1,357 million in real estate in the second quarter of the CY22 as compared to US$ 155 million in the same period a year ago. The majority of the investment account to the warehousing segment at US$ 743 million between April 2021 and June 2021 as compared to US$ 41 million in the corresponding period last year.

In the second quarter of this calendar year, investment in retail real estate stood at US$ 278 million as compared to no inflow in the same period last year. The office market registered an inflow of US$ 231 million in the second quarter of 2021, up from US$ 66 million in the same quarter previous year.

Institutional investment in the residential segment increased to US$ 106 million, as compared to US$ 48 million in the corresponding period last year.

According to JLL, the increase in the value and volume of investments is backed by the introduction of Benami Transactions (Prohibition) Act, the Real estate Regulation and Development Act in 2016 (RERA), Real Estate Investment Trusts (REITs) in 2014 and progressive relaxation in foreign direct investment rules over the years.

Ms. Radha Dhir, Chief Executive Officer and Country Head, India, JLL, said the first six months of 2021 registered investments of US$ 2.7 billion, (accounts of ~ 53% of the total investments in 2020) amid pandemic related challenges and restrictions.

She said, "Investors are demonstrating strength and are adjusting to the uncertain situation. Easing lockdowns in the first three months of 2021 also offered investors a first-hand understanding of the post-pandemic world.”

She added, “Investments in real estate are anticipated to sustain momentum.”

She said, "From where we look, institutional investors have gone through the litmus test of strength in the pandemic recovery and are anticipated to devote more capital in 2021.”

The institutional investment in real estate increased to US$ 2,688 million in the first six months of the 2021 calendar year, as compared to US$ 918 million in the corresponding period last year.

Between January 2021 and June 2021, investment in the office segment grew to US$ 1,344 million, as compared to US$ 571 million in the same period last year, while inflow in warehousing rose to US$ 772 million from US$ 94 million. The housing segment registered US$ 295 million funds, up from US$ 122 million in the same period last year. Retail real estate registered US$ 278 million in the first half of 2021 from no inflow in the same period last year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.