Investments in real estate touched $3.6 billion in Jan-Sep period: Colliers

• Investment inflows in the real estate sector have registered a year-on-year growth of 18% during January-September this year.
  
• The office sector accounted for 50% of the overall investment in the real estate industry, followed by retail.
  
• During January-September 2022, Delhi-NCR saw the highest share of inflows at 21%, followed by Mumbai and Bengaluru.

Investment into the real estate sector grew by 18% in the January-September period as compared to last year, says a report by Colliers, a Canadian investment management company. The inflows touched $3.6 billion in 2022 year to date, as per the report.

“The capital in Indian real estate is getting more broad-based with active participation also from domestic institutional and retail Investors. Domestic capital is seen to flow across asset acquisitions, with credit in multiple asset classes with varied pooled structures,” said Piyush Gupta, managing director, capital markets and investment services, Colliers India.

The office sector accounted for 50% of the overall investment in the real estate industry, followed by the retail sector which saw some large deals. “While investors remain committed to the Indian market, the hovering global recessionary concerns can lead to some delay in fund deployment,” the report said.

Asset Class	Investments YTD 2021 (in $ mn)	Investments YTD 2022 (in $ mn)	% Change
Office	1,178.5	1,802.7	53%
Retail	77.2	491.8	537%
Alternatives	415.3	398.8	-4%
Mixed-use	-	408.9	-
Industrial & Logistics	895.6	199.8	-78%
Residential	472.9	276.5	-42%

Source: Colliers

Metro cities saw the maximum surge
During January-September 2022, Delhi-NCR saw the highest share of inflows at 21%, followed by Mumbai and Bengaluru. Multi-city deals continue to be on the rise, with a 45% share in investments during YTD 2022.

“Over the next few quarters, while there may be some slowdown in deployment of funds due to the recession, we believe that the Indian market is relatively well-insulated and investors continue to view it favourably,” Vimal Nadar, senior director and head of research, Colliers India.

Domestic investors have become more active in the market, with their investment inflows accounting for 18% share, compared to 14% share during the same period last year. Global investors continue to dominate funding activity with higher participation in entity-led deals, says the report.

Foreign investors continue to remain bullish on India’s real estate sector. During 2017-2021, foreign capital flows into real estate jumped three times to $24 billion, compared to the preceding five-year period.

Real Estate Investment Trusts (REITs) introduced in the year 2019, too have become an attractive alternate financial platform to raise funds for investors.

Regulatory reforms undertaken by the government in the last few years – such as implementation of Real Estate Regulatory Authority (RERA) and GST too gave a fillip to foreign investments, the report says.

“As developers and investors venture into new geographies and asset classes, there is an increased demand for investigations into a real estate project across facets. Understanding associated risks and potential upsides of any prospective project has become pivotal to all stakeholders,” says Colliers.

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