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Institutional investment in real estate may rise slightly to USD 5.5 bn in 2018

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Dion Global

27 Dec 2018

Institutional investment in real estate during 2018 could rise marginally to USD 5.5 billion (around Rs 38,527 crore), as domestic and foreign investors see tremendous growth opportunities in the Indian property market, according to JLL India.

The sector has received investments worth USD 4.2 billion (about Rs 29,413 crore) till October and by the year-end the figure may touch USD 5.5 billion, the highest ever since 2009, the property consultant said in a statement.

Institutional investment in real estate stood at USD 5.42 billion during 2017, it added.

Institutional investments include family offices, foreign banks' real estate investment desks, pension funds, private equity, real estate investor-cum-developer, sovereign wealth funds and foreign corporate groups.

Lending by banks, Non-banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) is not included.

"India's real estate sector is at an inflection point. While the investment scenario improved post the global financial crisis, there has been a surge in institutional investments into the sector since the beginning of the year 2014.

"The trend suggests that the market offers tremendous growth opportunities to foreign and domestic investors," JLL India CEO and Country Head Ramesh Nair said.

He said the investment momentum is expected to grow manifold from its current levels considering various factors such as an ongoing policy overhaul, rising investor confidence, enhanced transparency, gradual recovery in housing segment and rising demand for grade A commercial office space.

JLL India released its report 'Institutional Flow of Funds to Indian Real Estate: Trends and Progress' that analyses key trends in institutional investments in the real estate sector over the last decade.

"One of the major drivers for the growing interest of investors in the commercial office space has been the government's move to bring in progressive modifications in India's REIT policy in last three years, making it more market friendly.

"As a result, global investors have invested significant capital in acquiring large office assets for building their REIT portfolios in India," said Samantak Das, Chief Economist and Head of Research and REIS, JLL India.

JLL India is the country's leading professional services firm specialising in real estate with an employee strength of over 10,000. It posted a revenue of over Rs 3,400 crore in 2017-18.

The company is present in 10 major cities (Ahmedabad, Delhi, Mumbai, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Kochi and Coimbatore).

The consultant provides investors, developers, local corporates and multinational companies with a comprehensive range of services.