India witnessed USD 2.4 billion inflows into built realty assets in H1 2021, up 52% YOY
Investments in built real estate properties in India was noted at USD2.4 billion (INR18,600 crore) in H1 2021, as per Colliers’ latest report, ‘A Brave New World: Investing Beyond the Momentary Squall.’ This represents a 52% increase from inflows in built assets in H1 2020. During H1 2021, China garnered the highest inflows in the Asia Pacific region, followed by Japan and Australia.
Interestingly, across Asia Pacific, roughly half of all office investments was seen in non-CBD assets 2020 and early 2021. This was partly driven by the increasing supply pipelines and larger assets being developed in these areas, as well as more life sciences and business park type of demand from the end-users. In India, while majority of the office investments have been in non-CBD locations across cities for some years now, investors are now scouting for office assets either in land or in under-construction stage. In India, office sector investments accounted for almost 35% of total investments in the first half of 2021, indicating a firm belief in the long-term resilience of the sector, even as many firms look to pivot to a hybrid work model.
“There is a huge potential for global funds in India. Office assets will continue to gain fervor from investors due to the steady returns from the asset class, and opportunity to bundle the assets under a REIT. Global funds are also looking to form investment platforms with developers, as they look to build their capabilities in sectors such as industrial and warehousing space, buoyed by the growth in e-commerce and the need for same-day delivery,” said Ramesh Nair, Chief Executive Officer, India & Managing Director, Market Development, Asia.
Industrial and warehousing sector garnered the second highest inflows with a share of 27% in total inflows in India during H1 2021. The increased demand from e-commerce companies for logistics space has in turn resulted in continued interest from institutional investors with inflows of about USD775 million (INR5,657 crore) in H1 2021 in H1 2021. Investors are forming joint ventures with local developers to build mega-portfolios.