Indian real estate seems to have finally come past the rough patch. Reposting their confidence in India’s realty segment, investors have pumped in the decade-high amount of $2.5 billion or Rs 17,600 crore in the first quarter of 2019.
As per a report by Cushman & Wakefield, there has been a consistent increase in the investment in Indian real estate. Not only the investments have more than doubled on a sequential basis, but it has also been the highest among first-quarter inflows since over a decade.
“Higher participation of foreign investors this quarter is a signal towards a sustained interest in the country’s real estate story backed by increasing transparency and friendly investment policies,” Economic Times quoted aid Anshul Jain, country head & managing director, Cushman & Wakefield India, as saying. “There are bright opportunities in the warehousing and logistics segment with office and retail sectors showing continued traction.”
Among the total investment made in the first quarter of 2019, foreign investors were found to be equally enthusiastic. In fact, foreign investors are holding a significant 64% share in the quarterly investment volume. Other joint ventures and partnerships made between set up by foreign investors and Indian counterparts constituted an additional 19% of the total private equity investments during the quarter.
Among the major investments made by the foreign investors, 54% share was targeted at the office segment, followed by the hospitality segment accounting for a share of 27%. Residential segment accounted for 20.9% of the overall private equity inflows at Rs 3,697 crore during the quarter, as per the report.
Among the cities, it is Mumbai that grabbed the lion’s share in the investment with a 30.5% share in the overall investments went into it, followed by Bengaluru with a 27.3% share.
One of the major reason in the spurge in the investment activity in Indian commercial realty is the success of India’s first REIT. As per Jain, the first successful REIT listing has opened an additional avenue for investors to participate in the momentum visible in office markets while also reinforcing the attractiveness of Indian realty. The much awaited and the first REIT listing, during the quarter, by Blackstone-backed Embassy Office Parks to raise Rs 4,750 crore was well received with an over-subscription of 2.57 times.
The key institutional investors during the quarter were found to be Blackstone & Brookfield Asset Management as well as Abu Dhabi Investment Authority.