Investments in the real estate sector tripled to Rs 1.4 lakh crore during 2014-18, mainly backed by institutional investments, a recent survey said.
According to the report by CII-JLL the realty sector witnessed investments to the tune of Rs 46,500 crore between 2009-2013 and Rs 1.4 trillion during 2014-18.
"Institutional investments increased in the last ten years and have improved investor confidence, risk appetite and transparency. Enhanced use of technology across asset classes have changed the outlook of investors towards Indian real estate," the report released during 'CII Realty and Infrastructure Conclave' said.
The report highlighted that the commercial office segment witnessed the maximum share of institutional investments in the past 10 years.
"Institutional investments in commercial office space rose to Rs 62,200 crore during 2014-18 from Rs 10,500 crore, a whopping six fold jump due to strong office space demand," it said, adding that rise in the development of environmentally sustainable buildings and subsequent demand from occupiers have added strength to this trend.
This asset class edged out the residential sector as retail and warehousing also witnessed some activity during 2014-18 period.
During 2009-2013, opportunistic funds returned to Indian markets and picked up marquee assets in select offices (commercial and IT parks/SEZs).
"Indias improving reforms scenario added value to the overall scenario. Notification of REIT regulations in 2014 led to a deluge of investments in high yielding assets with attractive valuations. This was especially in the non-IT office space as most quality IT/ITeS assets were acquired by funds," it said.
Commenting on the report, JLL India CEO and country head Ramesh Nair said, "India has gradually transformed into an investment destination of international repute post the global financial crisis and real estate and infrastructure have played a vital role. Within the space, adoption of technology coupled with policy reforms is one of the key factors for investors to consider greater participation."
While metros like NCR-Delhi, Mumbai and Bengaluru accounted for 74 per cent of the total institutional investments during 2009-18, we expect tier II and III cities to draw more funds in the coming years, he said.
Speaking at the event, Piramal Group executive director Anand Piramal said affordable housing will take off in a big way if various approval processes involved are made time-bound and the process is streamlined.
"If various approvals required for affordable housing projects are streamlined and made available in a time-bound manner then the projects will pick up. Volume, standardisation and speed are the critical success factors for affordable housing projects, considering these attributes time consumed for getting approvals is very high," he added.
Bajaj Finserve managing director and CEO Sanjiv Bajaj said developers should guard against unexpected downturns, should be content with a moderate level of debt and adopt strategies like always being far more leaner, quality consciousness and crunching of timelines, to keep themselves above water during slowdowns.
Commenting on the investors' preference, Samantak Das, chief economist and head of Research and REIS, JLL India said, "investment strategies have shifted to long-term partnerships from being merely opportunistic. There has been a rise in investments in the past decade.
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