Capital inflows into the Indian real estate sector grew by 42 per cent sequentially and 4 per cent year-on-year to $3.4 billion during January-June 2022. On a quarterly basis, capital inflows stood at $2 billion in April-June 2022, an increase of 47 percent from a year ago. According to a report by leading real estate consulting firm CBRE South Asia, Delhi-NCR, Chennai and Mumbai dominated the total investment volume in the second quarter of 2022, with a cumulative share of around 90 per cent.
The report titled ‘India Market Monitor-Q2 2022’ said that institutional investors led the investment activity with a share of around 65 per cent, mainly infused liquidity into brownfield (existing) assets, while developers ( 31 percent) continued to prefer greenfield. fresh) investment. About 70 percent of capital inflows during the second quarter of 2022 were deployed for net investment or acquisition purposes, while 30 percent were committed to development or greenfield projects.
Anshuman Magazine, Chairman and CEO (India, South-East Asia, Middle East and Africa), CBRE, said, “In 2022, real estate investments are expected to increase further on the back of a strong rebound across asset classes. With total capital inflows reaching $3.4 billion in the first half of 2022, we expect these investments to increase by more than 10 percent compared to the 2021 benchmark. Strong investment growth potential in greenfield assets. However, we can feel the effects of volatility in the global investment market.
The report also highlighted the dominance of the office sector of investment activity, which accounted for around 57 per cent, followed by land/development sites (30 per cent) and retail (10 per cent). Foreign investors accounted for about 67 percent of total investment volume in the second quarter of 2022, with Canadian investments receiving 59 percent.
Gaurav Kumar and Nikhil Bhatia, Managing Directors of Capital Markets and Housing Business, CBRE India “Key developers have raised over Rs 18,700 crore ($2.4 billion) through QIPs (Qualified Institutional Placements),” a statement said. IPO The path since fiscal 2019 — something that we expect to continue into 2022. With better financials and strong residential sales in 2022, we also see that leading developers are in a better position to negotiate with institutional investors for funds at a comparatively lower cost. ,
He added that investment in alternative assets, especially data centers, may gain more traction amid increasing digitization and a strong policy push towards a digital economy; Sustainability and ESG exercises will emerge as strong themes in investment strategies.
On the outlook, the report said leasing is expected to pick up going forward; Space take-up will be due to the release of stalled demand and the expansion and consolidation needs of the occupants. As the pace of recovery is encouraging, differentiated and high-quality institutional supply in core markets will continue to attract flight-to-quality absorption. Flexible work patterns have increased in prevalence, but many practitioners have yet to formally define hybrid working and formulate relevant policies and guidelines. This is likely to happen in the next few quarters.
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