Indian real estate saw foreign inflows of $26.6 billion between 2017-22

In the quarter that ended March 31, the institutional investments in the real estate sector were up 37 per cent to $1.7 billion: Colliers India

The foreign institutional inflows into real estate rose three-fold to $26.6 billion between 2017 and 2022 as compared to the preceding six-year period, a new report said. Foreign institutions accounted for 81 per cent of the total investment in real estate between 2017 and 2022, it added.

"India's favourable demographic indicators, deep digital talent pool, developmental government policies, infrastructure advancements and competitive costs have made it one of the top choices for global enterprises, fueling real estate demand in India. The strong economic and business fundamentals are enhancing institutional investors' sentiments; forging strategic partnerships to expand their portfolios," said Sankey Prasad, chairman and managing director at Colliers India, which released its "India- High on Investors' Agenda" report on Friday.

In the quarter ended March 31, the institutional investments in the real estate sector were up 37 per cent to $1.7 billion, compared to the same quarter in 2021-22. The office sector led the growth.

"Office sector saw the highest investments during 2017-22, accounting for about 45 per cent of the total foreign inflows," Prasad added.

The report added that India's Foreign Direct Investment (FDI) policies, increased transparency in deal structures, and higher investment limits through the direct route had encouraged global investors to invest here.

"India is on a long-term structural upcycle over the next few years and opportunities galore across spectrum and asset classes in real estate. Over the years, investment in Indian real estate has been getting broader and diversified with newer emerging concepts and themes. India's attractiveness from manufacturers, occupiers, and investors' perspectives in the Asian Market is on a consistent upswing," said Piyush Gupta, managing director of Capital Markets & Investment Services at Colliers India.

However, the data mentioned in the report also highlighted that global investment in the real estate sector has been constantly falling since 2017. It has fallen from $5.6 billion in 2017 to $3 billion in 2022.

On the other hand, domestic investments have started returning after a dip in 2020. In 2017 the sector saw investments worth $2.4 billion into the real estate sector. This fell to $0.05 billion in 2020. In 2022, it rose to $1.9 billion.

In the Asia-Pacific (APAC) region, India has become a preferred investment destination as Indian cities offer higher yields at relatively lower pricing points than other cities.

"Major Indian cities like Bengaluru and Mumbai occupy the second and third positions, respectively, in terms of commercial yield across the APAC region," said the report.