Institutional investment in real estate to grow 4% to Rs. 36,500 crore in 2021 despite COVID-19: Report

According to Colliers India, a property consultant, Institutional investment in real estate sector in India is expected to increase by 4% to reach Rs. 36,500 crore (US$ 5 billion) in 2021, driven by investors’ rising interest towards capturing attractive valuations amid the pandemic.

In 2020, institutional investment in real estate sector in India was valued at US$ 4.8 billion.

In the first six months of 2021, investment in the real estate sector in India stood at Rs. 21,170 crore (US$ 2.9 billion), registering a 2X growth over the same period last year.

On Tuesday, Colliers India stated, “In 2021, the total inflow is estimated to reach Rs. 36,500 crore (US$ 5 billion).”

The consultant stated that investors persist to have a strong inclination for office assets, which accounted for 35% share to the total investments in the first half of 2021.

Between January 2021 and June 2021, the warehousing and industrial sector registered investment worth Rs. 5,657 crore (US$ 775 million), the highest since 2016. The warehousing and industrial sector accounted for 27% share to the total institutional investments in Indian real estate sector.

As per the report, “Investors are considering the present situation as an opportunity to secure properties at attractive valuations.”

Between January 2021 and June 2021, the residential sector accounted for 4% share to the total investments.

In the first half of 2021, data centres recorded investments worth Rs. 1,175 crore (~US$ 161 million), due to increasing number of corporate collaborations with global data centre providers.

The report said, “In the first half of 2021, investments in retail assets accounted for 29% share to the total investments. Amid the pandemic, investor’s sentiments continued strong for the real estate sector.”

 

Colliers anticipates that over the next three years, further capital will be leverage for build-to-core mixed-use, logistics and office assets as new investment platforms are established between regional developers and global private equity funds.

The consultant suggested that investors consider the last-mile funding in the residential sector, which is registering some underlying demand.

Colliers India said, “We expect impetus to develop across life sciences labs, logistics assets, and data centres as investors expand from conventional office investments.”

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