· FIIs grow three-fold during 2017-22
· Investments cross $ 26.6 billion
· 81% of the investments constitute overseas investments
· Office sector attracts 45% of total investments
The foreign institutional investments have been blooding the country’s real estate. During 2017-2022, there was a flow of a total of $ 26.6 billion investments in this sector. Compared to the flow of investments during the past six months prior to 2017, the flow has increased three-fold, according to the ‘India-High on Investors’ agenda report.
The real estate market has been progressing with transparency in transactions, ease of doing business, constructive approach and the policy reforms, the flow of overseas investments are steadily rising to this sector over a period of time. The positive factors contributing to this aspect are the nation’s population, well entrenched digital talent pool, development policies of the government, progress in creation of basic amenities. These have contributed for development of the nation as a destination for global enterprises. Strong financial, business aspects have won the credibility of the investors, who are keen to expand their portfolios in the country and also choosing the nation to strive strategic partnerships.
During 2017-22, the office sector received the lion’s share of the total investments. Of the total investments, this sector notched up 45%. The real estate agency Colliers India Managing Director Sankee Prasad has maintained that the investors show enthusiasm to invest in office sector, but are also keen to invest in alternative assets. The Colliers report indicates that 81 per cent of the investments that has flown into the real estate sector are foreign institutional investments. The pro-investor FDI policies, transparency in agreements, increased ceiling to make direct investments in realty sector are encouraging the investors to pump their funds in to this sector. In first quarter of 2023, the FIIs have reached $ 1.7 billion with an annual growth of 37%.
“India is on a long-term structural up cycle over the next few years and opportunities galore across spectrum and asset classes in real estate. Over the years, investment in Indian real estate has been getting broader and diversified with newer emerging concepts and themes. India’s attractiveness from manufacturers, occupiers, and investor’s perspective in the Asian Market is on the consistent upswing,” adds Colliers India managing director of capital markets & investment services Piyush Gupta. On the perspective of global and APAC investors, the Indian property market currently offers attractive pricing, better valuations, and higher yields. At the APAC level, India has become a preferred investment destination as Indian cities offer higher yields compared to other cities in the region at relatively lower pricing points. Major Indian cities like Bangalore and Mumbai occupy the 2nd and 3rd positions, respectively, in terms of commercial yield across the APAC region.
