Institutional investors pumped in $2.9 billion into the Indian real estate sector in the first six months of 2023, little changed from the $2.8 billion invested in the same period last year, JLL India said in a report.
A total of 22 deals were transacted during January to June, and the average deal size rose 17 per cent to $134 million, the report said. “The investment pattern continues to be robust and is expected to cross $5 billion in 2023, which has been the annual trend pre-Covid and in 2022.”
The investment inflow was an indication of the growth opportunities as “India continues to emerge as a bright spot among international markets,” the property consultant said.
Domestic institutional investors accounted for 44 per cent of total investments, up from 18 per cent a year ago. Of the foreign capital flows, the highest contribution was from the Asia-Pacific Region with 74 per cent share, JLL said.
“The last few years have witnessed an increasing trend of portfolio-level investments, compared to individual assets. This has led to an aggregation of assets across cities, with multi-cities accounting for 67 per cent share of the investment pie,” it added.
The office sector saw the bulk of inflows with a 66 per cent share, followed by residential at 17 per cent, and warehousing at 12 per cent. Inflows into the office sector in the first six months surpassed the flows seen in the whole of 2022.
“The office market showcased resilience in the last two years and is seeking to seamlessly weave a hybrid mode of working through flex spaces,” the report said.
The residential sector attracted investment of $512 million across nine deals in H1 2023, up 19 per cent on year. The National Capital Region accounted for 44 per cent share of the investment pie, followed closely by the Mumbai Metropolitan Region at 39 per cent. The sector also saw commitments of $622 million through platform deals.
Inflows into warehousing were at $366 million, 80 per cent higher on year. Foreign funding constituted 70 per cent of investment volumes given that the outlook for warehousing remains bullish, led by accelerating manufacturing investments, aggressive expansion of e-commerce and the growth of third-party logistics companies.