Foreign investors accounted for about 55% of investment in land and developments in Jan-March period: Colliers
India ranked among the top five cross-border capital destinations globally for land and development site investments in the March quarter with foreign investors backing about 55% of the inflows, said real estate services firm Colliers.
Notably, 73% of the fresh foreign investments were aimed at ready assets, according to Colliers’ latest Asia Pacific Global Capital Flows report.
Foreign investors pumped $3.6 billion into India’s realty market in 2023, garnering a 67% share.
Four of the top markets globally in the first quarter of calendar 2024 were in the Asia-Pacific region led by China, Singapore, and Australia. “The sustained inclination of foreign investors towards ready assets is evident from the 73% investment inflows in Q1 2024. There is a persisting preference for high-quality office assets, both developmental and ready-to-move, with a notable focus on sustainability,” said Piyush Gupta, managing director of capitał markets and investment services at Colliers India. “Additionally, capital in the Indian real estate sector is becoming increasingly diversified, with growing investments in residential, logistics, alternative assets, and credit.”
Institutional investors in India mainly prefer completed and pre-leased income-yielding assets as they seek immediate and consistent returns, low-risk profile, compliance assurance, and reduced exit-related complexities, making them highly sought after investment opportunities, However, with most of the large Grade A projects already funded, investors are also forging partnerships with local developers and other investors in developmental assets spanning office, residential, and industrial segments. “India’s consistent economic growth, robust demand fundamentals, and positive business outlook compared to other countries have bolstered global institutional investor confidence in exploring diverse investment opportunities in India. The inflow into developmental assets covers different stages of development, such as platform formation, land acquisition, and construction,” said Abhishek Kapoor, CEO of Puravankara Group. Over the past two years, there has been a notable increase in land investments, especially for residential projects, with major developers strategically acquiring large, continuous land parcels. Also, institutional investments in the residential segment have seen a 20% increase in 2023 at $0.8 billion.
DRAWING BIG NAMES
Top institutional investors include PAG Credit and Markets, Ivanhoe Cambridge, Logos, Alta Capital and CPPIB
According to Colliers, institutional investors like PAG Credit and Markets, Invanhoe Cambridge, Logos, Alta Capital, and CPPIB invested in the Indian market across segments like residential, warehousing, and alternative assets.
“India will continue to attract investor attention in real assets due to the strong growth fundamentals of its economy. The country benefits from political stability and consistent regulatory reforms, which enhance predictability and confidence among investors. Additionally, the rapid institutionalisation of the sector has made it more organized and transparent, show- casing the potential for delivering superior risk-adjusted returns across various asset segments,” said Chan Chakravarti, former head of indirect strategies-APAC for Ivanhoe Cambridge.
Source – Economic Times
