Investments in India’s real estate sector in 2022 stood at an all-time high of $7.8 billion, up 32% against the numbers recorded a year ago, shows a recent report.
Overall capital inflows in the sector during the October-December period of the year stood at $2.3billion, an increase of 64% when compared to the previous quarter and an appreciation of 115% when compared with the same period last year, shows the report by property brokerage firm CBRE South Asia. The report titled Indian Market Monitor, 2022, shows the share of foreign investors in the total investment volume in 2022 stood at 57%, with investors from Canada (23%) and the US (15%) collectively pumped in nearly 37% of the capital. The share of domestic investors stood at 43%.
“The record investment inflows, the highest ever for the sector, reflect the resilience and growth potential of the Indian real estate sector. Undeterred by global headwinds, equity inflows into the sector are expected to remain steady in 2023. Additionally, we hope to see the listing of India’s first retail REIT in 2023, which would enable investors to expand their investment horizons,” says Anshuman Magazine, chairman & CEO-India, South-East Asia, Middle East & Africa, CBRE.
The growing significance of residential real estate is reflected by the fact that 47% of the total capital inflows in site/land acquisitions during 2022 were deployed for residential developments, while 25% were committed for mixed-use developments.
“While a few large institutional investors with a strong presence in the office sector in India could diversify their portfolios by including I&L, retail and DC assets, we could also see the entry of some new investors in the Indian RE landscape,” says the report. Higher financing costs amidst elevated levels of policy rates due to sticky inflation could impact returns in the short-term, it adds.