Institutional investment in Indian real estate has peaked to its highest level in 11 years. The conclusion comes from the recently released report, which states that Fund inflows from institutional investors reached its peak of Rs 11,212 crore, which is the highest third-quarter performance in the past 11 years.
According to the report released by Cushman & Wakefield, the investment volume increased 9 percent from a year ago in the first three quarters of 2018 and stood at $5.6 billion (Rs 37,815 crore). The trend seems to hint at heightened investor confidence.
“As office space supply and demand continues to experience a robust increase, coupled with the emergence of co-working spaces in a phenomenal way, the investor confidence in the sector will continue to remain intact,” ET Realty quoted Anshul Jain, country head & managing director, Cushman & Wakefield India, as saying. “While residential showed y-o-y growth in 2018, we shall keep a close eye on the developing NBFC situation that has the potential to tighten liquidity flows to this asset class.”
The data also show that the commercial office asset class accounted for nearly two-thirds of the investment volume during the quarter with Rs 7,140 crore investment. In fact, office sector investments during year-to-date 2018 have surpassed volumes by 1.3 times for the corresponding period of 2017.
The trend seemingly is here to stay for a while. There is reportedly still a large pipeline of transactions set to happen, which is expected to create a new benchmark and scale new peaks by the end of this year.
Talking about locations, it is Hyderabad that witnessed the maximum institutional investment recording almost 60 percent of the total investment inflows during the quarter. Mumbai was second with a 22 percent share of the quarterly investment flows.
The upcoming Real Estate Investment Trust (REIT) listing has also helped to increase investors’ interest as it is expected to serve as a benchmark for monetization and create liquidity for smaller investors to participate in the commercial office segment.