Inflows doubled to $1.3 b in 2023: CBRE

New Delhi India’s thor II and III cities saw a more than doubling of capital flows in 2023 na developera flocked to smaller cities for land acquisitions amid robust real estate demand across the country Capital flows hit a record $1.3 billion, compared 10 5000 million in 2022, according to real estate consultancy CHRIS

While average annual inflow from 2010 to 2022 stood at $500 million, more than 85% of transactions in these cities were focused on development sites and the logistics sector

According to CBRE, several cities such as Ahmed abad, Indore, Jaipur, and Coimbatore are also seeing robust private equity (PE) Interest across sectors such as e-commerce, startups, banking, financial services and insurance (BFSI) all of which can have a complementing impact on real estate investments.

From 2019 to 2023, Mumbai, Delhi-NCR, and Benga luru remained the gateway markets for institutional Investors, collectively attracting about 45% of the total capital deployed.

“This dominance remained consistent throughout the review period, with over 370 deals representing over 57% of the total activity recorded in these cities. Notably, these markets attracted a combined equity capital of $21 billion,” CBRE said in a report. This is attributed to the relatively larger presence of investment-grade projects, robust urban infrastructure, a diverse talent pool, strong tenant tena covenants, and overall market maturity ty in in these these cities. c

While office sector investments remain concentra ted in metro cities, capital inflows are increasingly targeting development across development sites, industrial & logistics (I&L), hospitality, residential, and retall sectors in tier II and III locations. This trend is fuelled by growing real estate activity and healthy demand in these emerging markets.

Several global investment funds are also exhibiting caution amidst an uncertain macroeconomic scena rio in leading economies. This has opened a window of opportunity for several mid-sized segment investment funds.

The deferment of capital allocation by larger funds is opening avenues for smaller funds to try and gain access to smaller yet high-quality office assets, Recent introduction of micro-real estate in- vestment trusts (REITs), focusing on smaller, well- maintained properties, further fuels this trend.

Source- Economic Times


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