Institutional investment in real estate likely to fall 20 pc to around USD 4 bn in 2021: Report
Institutional investments in real estate may fall 20 per cent to USD 4
billion during this calendar year because of a higher inflow of funds in
2020, according to property consultant JLL India.
During the January-September period, the institutional investment rose
to USD 2,977 million from USD 1,534 million in the year-ago period.
“Unless some large portfolio deals are not inked at the end of the year,
annual investments are expected to be in the USD 3.8-4 billion range in
2021,” JLL said in a statement.
Institutional investments managed to cross the USD 5 billion mark in
2020 due to large portfolio deals worth USD 3.2 billion during the last
quarter of the year.
“However, 2021 witnessed more broad-based recovery with 31 deals during
the first nine months as against 19 deals during the same period of
2020,” it noted.
On the outlook for the next year, JLL India expects investments to cross
USD 5 billion mark, which was witnessed by the Indian real estate
annually during the 2017-2020 period.
The institutional flow of funds includes investments by family offices,
foreign corporate groups, foreign banks, proprietary books, pension
funds, private equity, real estate fund-cum-developers, foreign-funded
NBFCs and sovereign wealth funds. It also includes anchor investors in
REITs.
“Investors, apart from the office sector, also allocated fresh capital
in the residential segment, which staged a smart recovery, while
warehousing and data centres continued to attract investments,” JLL
India said.
The retail sector witnessed capital commitments through investment
platforms that remain bullish on its growth prospects, it added.
Radha Dhir, CEO and Country Head, India, JLL, said, “The performance of
institutional investments in the Indian real estate during 2021 can be
summed up in one theme ‘increasing immunity to uncertainty’.”
The Indian economy is expected to gain further strength and broad-based
investment growth on the back of a low-interest environment, continued
monetary stimulus, improving revenue visibility across asset classes,
and inclusive growth policy, she added.
Listing of REITs, distressed opportunities, asset diversification, high
growth data centre, and logistics segments will drive the investment
momentum in 2022, Dhir said.
