Investments in the Indian real estate sector grew 32 per cent y-o-y to an all-time high of $7.8 billion in 2022. On a quarterly basis, investments in Indian real estate stood at $2.3 billion in the October-December 2022 quarter, growing 64 per cent q-o-q and 115 per cent y-o-y, according to a report by real estate consultancy firm CBRE.
“Foreign investors took the lead with a 57 per cent share in the overall investment volume in 2022. Investors from Canada accounted for nearly 37 per cent of the foreign capital inflows, followed by those from the US (15 per cent). Domestic investors contributed the remaining 40 per cent of the total investment in 2022. Overall, institutional investors led the 2022 investment activity with a share of nearly 51 per cent, followed by developers at 32 per cent,” CBRE South Asia said in the report, titled ‘India Market Monitor 2022’.
It added that Delhi-NCR led the investment activity, followed by Mumbai. Cumulatively, the two cities accounted for over 56 per cent share of the investments in 2022. Land/ development sites dominated investments with a share of 48 per cent, followed by the office sector with a 35 per cent share. About 44 per cent of the capital inflows in site/ land acquisitions were deployed for residential developments, while 25 per cent went into mixed-use developments.
Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East & Africa) of CBRE, said, “The record investment inflows, the highest ever for the sector, reflect the resilience and growth potential of the Indian real estate sector. Undeterred by global headwinds, equity inflows into the sector are expected to remain steady in 2d023. Additionally, we hope to see the listing of India’s first retail REIT in 2023, which would enable investors to expand their investment horizons.”
Gaurav Kumar, managing director (capital markets and residential business) of CBRE India, said, “There is a possibility that some large institutional investors could diversify their portfolios by incorporating I&L, retail, and DC assets. We may potentially see a few new sets of investors in the real estate segment.”
On the investment outlook, CBRE said capital flows are likely to remain steady; investors are expected to remain cautious amidst recessionary fears in the US and Europe. The year 2023 could see the listing of India’s first retail REIT, which would widen investment avenues for investors.
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