Residential real estate sector, in 2021, saw the highest surge in four years in investments and a two-fold jump from 2020 at $0.9 billion, a report by Colliers India stated. According to the report, the Inflows in the residential segment witnessed a significant uptick with a two-fold increase yoy amid a recovery in the sector and increased demand for capital.
“Private equity funds are looking at providing capital for fresh investments in residential projects, and also for refinancing/restructuring existing loans of banks and NBFCs. The luxury segment accounted for about 35 per cent of the total investments, with the rest in mid-income and affordable category projects. Luxury residential projects witnessed increased investments in 2021 as demand for bigger homes and gated communities has significantly increased during the past one year,” as per the report.
Overall, the real-estate institutional investment volumes closed at $4 billion in 2021. Although it is a 17 per cent dip yoy, capital flows, as per the report, came on a broad-based recovery across most asset classes, geographies and doubled in the number of deals compared to 2020.
Further, the dip was noticed as some large transactions had concluded in 2020. 2021 was one of the best years for logistics and residential sectors, accounting for about half of the total investments at about $2 billion, the report added.
Despite the corporates in India adopting a WFH mode / hybrid model for most part of the year, office sector attracted the highest investments at $1.2 billion, accounting for 31 per cent of the total investments in 2021. This reaffirms the resilience and the long-term growth story of the sector.
On the other hand, the industrial and logistics sector was the most sought-after and investments rose to a five-year high of $1.1 billion. This was also more than a five-fold increase from 2020. This sector has been drawing strong operator and investor interest due to increased demand from e-commerce and 3PL players post pandemic. This growth momentum as per Colliers India is likely to continue in 2022, as major global investors and developers continue to expand their footprint in proximity to high consumption areas across Tier I and II cities.
“The pandemic has accelerated a number of structural trends and will have lasting changes on the nature of real estate business in India. The Investments across asset classes have seen promising inflows in 2021 reflecting several opportunities for investors to recalibrate their strategy towards growth sectors. This is already evident in the rapid investment being allocated towards the residential, increasing development of data centers, alternatives, industrial, office as well as the evolution of the life science sector. There is a reflection of confidence in the industry to participate in the growth story and hence develop, build and own real assets in long term.” says, Piyush Gupta,Managing Director, Capital Markets and Investment Services, Colliers India.
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