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Realty investment hits $1.35 bn in April-June
Realty investment hits $1.35 bn in April-June
Institutional investors deployed $1.357 billion into the Indian commercial real estate market in the second quarter (April- June) of 2021, representing a ninefold increase year-on-year, according to JLL’s ‘Capital Markets Update Q2 2021’ report
Institutional investors deployed $1.357 billion into the Indian commercial real estate market in the second quarter (April- June) of 2021, representing a ninefold increase year-on-year, according to JLL's 'Capital Markets Update Q2 2021' report. Capital deployments in the April-June period represented the most active second quarter in five years.
According to JLL, the pace and volume of investments over the past decade have been supported by the introduction of Real Estate Investment Trusts (REITs) in 2014, the Real estate Regulation and Development Act in 2016 (RERA), Benami Transactions (Prohibition) Act and progressive relaxation in foreign direct investment norms over the years.
"Despite the second wave of Covid hitting India in April this year, the first six months of 2021 saw investments of $2.7 billion which is 53 per cent of the total investments seen in 2020. Investors are showing resilience and are adapting to the uncertain environment. Relaxing lockdowns during the first three months of 2021 also gave investors a first-hand experience of the post-pandemic world," said Radha Dhir, CEO, JLL. "The first half of 2021 saw broader investor participation and although the economic dent created by the second wave will lead to slower growth in 2021, investments in real estate are expected to maintain momentum," she added.
Outlook
The investment trends for the last three months underline one key trend- Strong investor confidence in the Indian real estate sector. The experience gained over the past year has helped investors to deal with the more severe resurgence of Covid and will guide future course. Though the economic dent created by the second wave will lead to slower growth in 2021, investments in real estate are expected to stay strong through the year.
Defensive sectors like warehousing and data centers are likely to gain center stage, while office assets will gain interest with more visibility on work from office trends. The REITs market is expected to get a further boost as the reduction in lot size of REIT units is expected to drive more retail participation. The growth prospects of the data centers are expected to attract capital at the development stage with ambitious expansion plans by the data center players.
Institutional investors have passed the litmus test of resilience during pandemic resurgence and are expected to commit more capital in 2021.
