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

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

Colliers India is a property consulting firm that predicts that India will see a 4% increase in institutional real estate investment to reach 36,500 cr (US$ 5billion) by 2021. This was due to the rising interest of investors in capturing attractive prices.

The value of Indian institutional investments in the real estate sector was US$ 4.8billion in 2020. India's investment in real estate in the first six months of 2021 was Rs. 21,170 million (US$2.9 trillion), representing a 2X increase on the same period last fiscal year. Colliers India reported Tuesday that the total Indian inflow would be Rs. 36,500 Crores/US$ 5Bn.

The consultant said that investors continue to be inclined to office assets. They accounted for 35% of all investments in the first six months of 2021. Between January 2021-June 2021, the warehousing investment and industrial sector investment totaled Rs. 5,657 crores (US$ 775million), the highest investment since 2016. 27% of Indian institutional investments were made in the warehousing or industrial sector.

According to the report, investors see the current market situation as an opportunity and are looking for properties that have attractive values. Between January 2021-June 2021, residential investments accounted to 4% of the total investments. Data centers have recorded investments of Rs. 1,175 million (US$ 161million), thanks to an increasing number of corporate collaborations.

The report stated that retail assets contributed 29% to total investments for the first six months of 2021. Despite the pandemic, investors continued to be positive about the real estate sector.

Colliers believes that the next three years will see more capital being leveraged for build-to-core mix-use, logistics, office, and office assets. New investment platforms will also be established between regional developers as well as global private equity funds.

The consultant suggested that investors think about last-mile funding for the residential sector. There is some underlying demand.

Colliers India stated that "we expect impetus across life sciences labs and logistics assets as investors expand from traditional office investments."