Real estate sector saw investments worth $43.3 billion in four years

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Overall investments in the real estate sector between fiscal 2018 and 2022 stood at $43.3 billion, of which $31.8 billion came from equity investments while debt investments stood at $11.5 billion, according to a CBRE South Asia report titled ‘Indian Real Estate: Betting on a Capital Future’.

According to the report, the office sector was the prime focus, particularly of foreign institutional investors, attracting investments worth nearly $13 billion and accounting for over 40 percent of the total equity inflows during the period. Despite COVID-19-induced domestic and global headwinds, core assets (built-up office properties) exhibited resilience.

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Next on the list was the sites and land parcels segment, where $12 billion was deployed, translating into a share of about 39 percent in cumulative equity investments during the 2018-22 financial years, according to the report.

This situation could change, since the report added that a broad analysis of the data for the first quarter of FY23 showed that development sites and land acquisitions dominated investment flows with a share of about 49 percent, followed by the office sector (26 percent).

Domestic investors, primarily developers, led the inflows in Q1FY23 with an almost 73 percent share while institutional investors accounted for the rest. In terms of geographical spread, Delhi-NCR (15 percent) and Mumbai (14 percent) dominated investment inflows during Q1FY23, the CBRE report stated.

North America- and Singapore-based investors have remained the largest foreign contributors in equity investments in real estate since 2018, with shares of nearly 41 percent and 8 percent, respectively.

Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East and Africa), CBRE, said that 2022 was a landmark year in terms of land activity and is indicative of the long-term bets that investors are willing to take on the real estate sector in India.

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“Over the next two years, we expect investment flows to remain steady with cumulative inflows of $16-17 billion. Taking into account historical and current trends and the capital that existing investment platforms have raised over the past two to three years, we anticipate that the office sector will continue to attract the largest share of institutional inflows, followed by I&L (industrial and logistics) and land parcels,” Magazine said.