‘Institutional Investment In India’s Realty Reach Decade High In 2018’
Institutional investments in the sector are expected to touch the $5.5-billion mark in 2018, reaching a decade high, driven by the steady flow to government reforms and the opportunities for both domestic and foreign investors. As of October 2018, the sector had clocked in $4.2 billion in institutional investment, a report released by a real estate advisory has unveiled. The report further reveals that the real estate sector between January 2009 and October 2018 has attracted nearly $30 billion of institutional investments.
However, between 2014-18, according to the report, $20 billion was invested out of the $30 billion that trickled in between 2008-18.
Besides soaring opportunities, economic stability has also fostered this growth. It wouldn’t be an exaggeration to say that progressive modifications in India’s Real Estate Investment Trust (REIT) policy over the last three years, the real estate law, amendment to benami transactions in India, demonetisation, etc., have together enabled investors to find Indian investment avenues attractive.
Of the total investment, commercial real estate has been the most preferred that boasts a five-fold jump in flows now amounting to $8.2 billion between 2014 and 2018 compared to $1.6 billion in the previous five years. It is now clear why eminent names such as CPPIB, Blackstone Group, Singapore's sovereign fund GIC, Goldman Sachs and Qatar Investment Authority have invested volumes into the Indian real estate.
Going by the trends, affordable housing, retail, industrial and warehousing sectors are among key focus areas with cities, including Mumbai, the National Capital Region and Bengaluru leading the way.
According to the report, about 80 per cent share of institutional investment comes from private equity (PE) investors. With proper regulations, accountability and transparency and ease of entry into various sectors, India is emerging as one of the global destinations for foreign investors.
The experts are now looking forward to the REIT listings in the market that are expected to open up the sector further. Reits would give developers an option to exit or convert their holdings in to tradable stocks, through income generating assets.
With inputs from Housing News