Chennai: Institutional investment in real estate could rise marginally to $5.5 billion (around Rs 38,527 crore) before year-end, as domestic and foreign investors see tremendous growth opportunities in the Indian property market, a report has stated.
Property consultant JLL India, in its report ‘Institutional Flow of Funds to Indian Real Estate: Trends and Progress’, said the sector has received investments worth $4.2 billion (about Rs 29,413 crore) till October and by the year-end the figure may touch $5.5 billion, the highest ever since 2009. Institutional investment in real estate stood at $5.42 billion during 2017, it added.
Institutional investments include family offices, foreign banks’ real estate investment desks, pension funds, private equity, real estate investor-cum-developer, sovereign wealth funds and foreign corporate groups.
Lending by banks, Non-banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) are not included.
“India’s real estate sector is at an inflection point. While the investment scenario improved post the global financial crisis, there has been a surge in institutional investments into the sector since the beginning of the year 2014. The trend suggests that the market offers tremendous growth opportunities to foreign and domestic investors,” CEO and Country head, JLL India, Ramesh Nair said.
He said the investment momentum is expected to grow manifold from its current levels considering various factors such as an ongoing policy overhaul, rising investor confidence, enhanced transparency, gradual recovery in housing segment and rising demand for grade A commercial office space.
“One of the major drivers for the growing interest of investors in the commercial office space has been the government’s move to bring in progressive modifications in India’s REIT policy in last three years, making it more market-friendly. As a result, global investors have invested significant capital in acquiring large office assets for building their REIT portfolios in India,” said chief economist and head of Research and REIS, JLL India, Samantak Das.
JLL India is the country’s leading professional services firm specialising in real estate with an employee strength of over 10,000. It posted a revenue of over Rs 3,400 crore in 2017-18.