BENGALURU : Institutional real estate investments closed at $ 4 billion in 2021, a decrease of 17% from the previous year, which saw the closing of a few important transactions.
Despite the decline, capital flows have seen a widespread recovery in most asset classes and geographies and have doubled the number of transactions compared to 2020, according to a note from real estate advisor Colliers India. 2021 has been one of the best years for the industrial and logistics and residential sectors, accounting for around half of total investments at around $ 2 billion.
The office sector attracted the highest investment with $ 1.2 billion, accounting for 31% of total investment in 2021. However, the commercial office sector accounted for 45% of the total investment of $ 4.8 billion in 2020.
The industrial and logistics sector saw investments reach a five-year high of $ 1.1 billion, a five-fold increase from 2020. The sector has attracted strong interest from operators and investors due to demand. increased e-commerce and third-party logistics (3PL) after the pandemic. This growth momentum is expected to continue in 2022, as global investors and developers continue to expand their presence near high consumption areas in Tier I and II cities.
“… Investments in all asset classes saw promising inflows in 2021, reflecting several opportunities for investors to recalibrate their strategy towards growth sectors. This is already evident in the rapid investment in residential, the growing development of data centers, alternatives, industry, offices as well as the evolution of the life sciences sector. There is a reflection of the confidence in the industry to participate in the growth story and therefore develop, build and own real assets for the long term, ”said Piyush Gupta, MD, Capital Markets and Services. investment, Colliers India.
2021 saw a healthy investor appetite for the residential, industrial and logistics sectors, as the office continues to dominate. The former has hit record highs in recent times, totaling nearly $ 2 billion in institutional investment volumes. This echoes the strong fundamentals and attractive valuations of the underlying assets, supported by a positive economic outlook.
“… The widespread recovery signals signs of turmoil among investors and the expansion of REITs, asset diversification, impending potential in industry and logistics will occupy them in the Indian market.” Additionally, niche asset classes such as data centers, student housing and life sciences will provide a unique opportunity for investors to diversify their investments, ”said Vimal Nadar, Senior Director and Head of Research , Necklaces India.
Entries in the residential segment have increased significantly with a doubling year-over-year against a backdrop of a recovery in the sector and increased demand for capital. Private equity funds seek to provide capital for new investments in residential projects, as well as to refinance or restructure existing loans from banks and NBFCs.
The luxury segment accounted for around 35% of total investment, with the remainder being in middle-income and affordable category projects. Luxury residential projects have seen an increase in investment in 2021, with demand for larger homes and gated communities increasing dramatically over the past year.
With increased investment in some luxury residential projects and data centers, Mumbai led the investment pie in 2021 with a 20% share. Foreign private equity investors continued to hold the majority of investment volumes, but domestic funds showed greater confidence compared to last year, thanks to a steady recovery in the economy.
Investments in alternatives continued the growth momentum in 2021, driven by data centers. Alternative assets (student housing, co-living, life sciences, data centers) represented 11% of total investments in 2021, up from 8% in 2020. 2021.
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