Indian real estate drew $63-bn institutional investment since 2006: JLL India

Indian real estate has attracted $62.8 billion (approximately Rs 4.81 lakh crore) of institutional investment since 2006, driven by a series of reforms in the sector, according to property consultant JLL India.

"The series of reforms that started in 2014 led to increased capital flows over the years. Out of the total Institutional investment of USD 62.8 billion from 2006 to March 2022, 58 per cent was received from 2015 onwards," the consultant said in a statement.

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Key reforms, like the introduction of REITs in 2014, the Real Estate (Regulation and Development) Act (RERA) in 2016, the Benami Transactions (Prohibition) Act, GST, and the progressive relaxation of foreign direct investment (FDI) norms over the years led to improved transparency, accountability, professional management, and development of markets for smoother entry and exit of capital.

The positive impact of the reforms resulted in investments of $36.7 billion flowing into Indian real estate from 2015 to Q1 of 2022 calendar year, it said.

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"Deal flow currently looks very healthy, with USD 943 million transacted in Q1 and with several large deals in the pipeline we expect 2022 investment volumes to be at par with 2018 and 2019 (pre covid) levels," said Lata Pillai, Managing Director and Head, Capital Markets, India, JLL. Data centre and warehousing would remain sectors to watch out for as many hands chasing few opportunities will lead to competitive pricing and compressing cap rates, she added.

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"The lifting of restrictions led to a pick-up in investment momentum during Q1 2022. This quarter saw a 41 per cent jump in institutional investments over Q4 2021," Pillai said. While domestic capital chased deals in the residential sector, foreign investors were largely seen focusing on commercial assets, she said.

"Healthy leasing momentum has brought back-office demand with investors entering JVs/ development partnerships. Retail also continued to see good traction with some opportunistic deals in the market," Pillai said.