New Delhi:
According to the Colliers-FICCI report, foreign capital flows to Indian real estate more than tripled to $23.9 billion in 2017-21 compared to the previous five years.
In his report ‘Foreign investment in Indian real estate turn a corner’, real estate advisor Colliers notes that global investors had shown a greater propensity to invest in Indian real estate, spurred by the regulatory reforms introduced in 2016.
“Foreign investors, who had previously refrained from investing in the Indian real estate market due to the lack of transparency, started investing in the country with more optimism from 2017,” Colliers said.
According to the data, foreign investment in real estate in 2017-21 amounted to $23.9 billion, up from $7.5 billion in 2012-2016.
Total investment in Indian real estate in 2012-2021 was $49.4 billion, 64 percent of which came from foreign investors.
The share of foreign investment in Indian real estate grew to 82 percent in 2017-2021, compared to 37 percent in the previous five-year period.
In 2017-21, the office sector accounted for 43 percent of total foreign investment, followed by the mixed-use sector, which accounted for 18 percent.
Investments in the industrial and logistics sector came in third place, surpassing the residential sector.
Foreign investors remained cautious about the housing sector in the wake of the NBFC crisis and moderated home sales, Colliers said.
The share of housing in total foreign investment fell to 11 percent in 2017-2021, from 37 percent in a previous five-year period.
Foreign investment in the office sector had reached $2 billion every year since 2017, except in 2021, when the number of investments nearly halved.
During 2017-21, alternative assets saw inflows of approximately $1 billion, most of it during the pandemic years.
“The government data localization and infrastructure status policies recently received for data centers are likely to boost the establishment of new data centers in the country,” the consultant said.
The share of investment from the US and Canada combined has been more than 60 percent in foreign investment every year since 2017.
Despite the challenges posed by the pandemic, US and Canadian funds continue to actively explore the industrial segment beyond the offices and mixed-use assets.
Similarly, most investments from Asia are focused on the office, industrial and logistics sectors.