Post-Covid, Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) in the real estate sector saw a major dip in 2022, according to a report by property consultant Knight Frank on August 26.
Net FPI dropped from more than 40 billion to marginally less than $30 billion, while FDI plummeted to $16.7 billion.
Knight Frank’s 'India Real Estate Vision 2047' was presented at the National Real Estate Development Council’s (NAREDCO's) Silver Jubilee foundation day conference in Hyderabad.
FDI is an investment made by a person or company in one country in a project or business in another, while FPI involves holding securities and other financial assets in a foreign country.
Explaining the dip, Vivek Rathi, National Director of Research, Knight Frank India, said, "Private equity investment by foreign investors (FDI) has come down by 10 percent in 2022, and stands even lower than pre-Covid times. This year, it is expected to be almost similar, or maybe 5 percent higher than last year."
Indian real estate unaffected
However, Rathi said that despite the dip, Indian realty remains buoyant, as reflected in real estate sales and also in the de-leveraged positions of Indian developers.
As of today, FDI comprises less than 2 percent of the investments in the sector, added Rathi
"India’s real estate sector is worth nearly $480 billion, of which foreign private equity comprises less than $5 billion. Indian real estate is mostly funded by domestic capital from customer advances, or other channels such as banks or non-banking financial institutions," Rathi explained.
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