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Real estate investments hit $3.6 billion in January-September: Colliers

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  • Investment inflows in the real estate sector recorded a year-on-year growth of 18% in January-September this year.
  • The office sector accounted for 50% of total investment in the real estate sector, followed by retail.
  • In the period January-September 2022, Delhi-NCR saw the highest share of influx at 21%, followed by Mumbai and Bengaluru.

Investment in the real estate sector rose 18% in the period January-September compared to last year, according to a report by Colliers, a Canadian asset manager. According to the report, 2022 inflows have been $3.6 billion so far.

“Capital in Indian real estate is broadening with active participation, including from domestic institutional and private investors. Domestic capital flows across asset acquisitions, with credit across multiple asset classes with varied pooled structures,” said Piyush Gupta, managing director, capital markets and investment services, Colliers India.

The office sector accounted for 50% of total investment in the real estate sector, followed by the retail sector which saw some big deals. “While investors remain committed to the Indian market, floating concerns about the global recession could lead to some delay in fund deployment,” the report said.

Asset class Investments YTD 2021 (in $mn) Investments YTD 2022 (in $mn) % Change
Office 1,178.5 1,802.7 53%
Retail 77.2 491.8 537%
alternatives 415.3 398.8 -4%
Mixed use 408.9
Industrial & Logistics 895.6 199.8 -78%
residential 472.9 276.5 -42%

Source: Colliers

Metro cities saw the maximum increase

In the period January-September 2022, Delhi-NCR saw the highest share of influx at 21%, followed by Mumbai and Bengaluru. Multi-city deals continue to be on the rise, with a 45% share of investment during YTD 2022.

“In the coming quarters, while there may be some slowdown in fund spending due to the recession, we believe the Indian market is relatively well isolated and investors remain positive,” said Vimal Nadar, senior director. and head of research, Colliers India.

Domestic investors have become more active in the market, with their investment inflow accounting for 18% share, compared to 14% share in the same period last year. According to the report, global investors continue to dominate financing activity with increased participation in entity-led deals.

Foreign investors remain optimistic about the Indian real estate sector. In 2017-2021, foreign capital inflows into real estate increased three-fold to $24 billion, compared to the previous five-year period.

Real Estate Investment Trusts (REITs), introduced in the year 2019, have also become an attractive alternative financial platform to raise funds for investors.

The government’s regulatory reforms in recent years, such as the implementation of the Real Estate Regulatory Authority (RERA) and also GST, have boosted foreign investment, the report said.

“As developers and investors venture into new geographies and asset classes, there is an increasing demand to investigate a real estate project in all its facets. Understanding the associated risks and potential benefits of a future project has become critical for all stakeholders,” Colliers said.

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