While India continues to attract global institutional investors’ interest, there has been a decline in the actual foreign investment in Indian real estate. A latest report stated that the June quarter has shown a decline in the foreign investment, primarily owing to the delayed conclusion of a few large deals.
In the June quarter, approximately $1.08 billion has been invested across 11 transactions in Indian real estate. As per the data by Venture Intelligence, the foreign investment in Indian real estate is down by 20% from a year ago.
“A few mega-deals that are under discussion have not fructified in the latest quarter and their closing should reflect in the upcoming quarter,” ET Realty quoted Arun Natarajan, founder of Venture Intelligence, as saying. “These are large and complex transactions and therefore are taking time to conclude.”
Since there are many mega-sized deals under negotiation, the experts remain confident about the interest remaining intact in Indian real estate and the dip is only a temporary setback. Global investors, especially entities from Singapore and Canada, reportedly remain aggressive to pick up ‘marquee assets’ in India.
The reports further stated that it is commercial real estate that attracted more investment that residential sector. While The commercial market dominated both in terms of volume and value in the second quarter of the year as 7 transactions worth $766 million, the residential segment attracted investments worth $34m only.
However, this report does not seem to point to any concrete conclusion in investment trend in India. Another report from Knight Frank stated that the inflow of foreign capital into the Indian real estate has registered a 31 percent growth on a year-on-year basis in 2017. The Knight Frank report credited reform measures including the Real Estate Regulatory Act (RERA), Goods and Services Tax, and demonetization as the reason behind the upward trend of foreign investment.