Real estate in India has been on a Rise in recent years . There are many factors for the Growth in the real estate sector but one of the primary reasons for the Growth is the investments received from Foreign Investors.Moreover,$18 Billion Dollars have been deployed and These investments are primarily based From the North America and also from Singapore investors accounting for up to 45% of shares. These investment are mostly in metropolitan cities like New Delhi, Hyderabad, Mumbai, Bangalore, Pune.
Foreign investors investing in Real Estate in India has become a New trend . This trend started in the year of 2018 and is still continuing till Date and the total Valuation is almost $48 Billion Dollars According ,To the Report by the CBRE South Asia. Equity Investments Are Almost $31 Billion dollars And Debt investment Are approx of $11 Billion.
The majority of investments in the real estate market come from investors in North America and Singapore, who own around 45% of shares. These investments are concentrated in major cities such as New Delhi, Hyderabad, Mumbai, Bangalore, and Pune. Over the past five years, the APAC region has invested the most money in the market, with almost 50% of shares, while the remaining funds have been divided among domestic and intra-regional investments.
In India, the real estate investments mainly focus on the office sector, which has received investments of approximately $13.5 billion. The office sector is particularly noteworthy, as foreign equity investments from countries outside of the APAC region have dominated the market over the past five years, comprising nearly 47% of the total foreign equity investment. Domestic investments accounted for the remaining 42%.
The remaining portion of equity investment flows in India’s real estate market came from intra-region investments from countries within the APAC region. The office sector was the primary focus for investors, especially foreign institutional investors, with investments totaling around $13 billion, representing over 40% of the total equity inflows. Sites and land parcels were the second most attractive investment opportunity, with more than $12 billion deployed for their acquisition, accounting for approximately 39% of cumulative equity investments during the period of 2018-2022.
During the last five years, more than twelve foreign institutional investors, asset managers, and developers have entered India’s real estate sector. Early investors focused on office, industrial and logistics, and residential sectors, while newer investors have targeted the data center space in the past 12-18 months. The majority of these investors were based in the APAC region, including countries like Japan, South Korea, Singapore, and Australia. Additionally, some existing investors with limited exposure to real estate have increased their involvement in the market by making multiple acquisitions and forming partnerships.
According to the Q1 2023 data, development sites/land acquisitions were the most dominant investment flow, accounting for approximately 49%, followed by the office sector at 26%. Domestic investors, mainly developers, led the inflows in Q1 2023 with a share of nearly 73%, while institutional investors took the remaining share. Delhi-NCR and Mumbai were the dominant cities in terms of investment inflows during Q1 2023, with a share of 15% and 14%, respectively.
CBRE’s CEO Anshuman Magazine expects investment flows to remain steady with cumulative inflows of $16-17 billion in the next two years, with the office sector continuing to attract the largest share of institutional inflows, followed by industrial and logistics and development sites/land acquisitions. India has become one of the most attractive investment destinations in the APAC region, with sustained demand across all sectors and stellar returns leading to an influx of new investors.
The REIT landscape is also expected to diversify this year with the potential listing of India’s first retail REIT. Over 6,800 acres of land have been acquired during 2018-22, with the residential market accounting for over 37% of the land acquired. Delhi-NCR and Mumbai led land acquisition activity, with mixed-use and residential land parcels accounting for nearly 60% of the total share.