BENGALURU: India’s strong economic resilience coupled with an attractive investment climate and rapid urban development has solidified its position as a highly sought-after real estate investment hub for international funds in the Asia-Pacific (APAC) region, said industry experts.
Consequently, several new funds are assessing the market, while established global and sovereign funds such as Mubadala, Mitsubishi Fudson, PAG Credit & Markets, Cadillac Fairview, Korea Investment Corporation and PNB Malaysia are either increasing their allocations or establishing fresh partnerships to capitalize on the burgeoning opportunities in the Indian market, they said.
“Investments in Indian real estate have been consistent for the past few years and have an innate potential to grow further on account of structural changes in demand for capital. Global investors have always remained at the forefront and consistently infused an average of $4 billion annually in the last five years, showcasing continued commitment and confidence towards the sector, “said Piyush Gupta, managing director, Capital Markets & Investment Services at Colliers India.
In addition to traditional avenues, the Indian market recorded investments in alternative asset classes, bolstering growth across office, residential and industrial segments. The Indian real estate sector has witnessed a significant turnaround in terms of consolidation and formalisation in recent years, sad experts. “Investors are eyeing India as an emerging market due to the increased transparency and prospects of economic growth, which have been facilitated by various policy initiatives. The recent exit of a global fund from a Real Estate Investment Trust (REIT) has further bolstered confidence among investors in terms of liquidity. The returns have also been attractive, with REIT yield dividends trading at about 8% to 8.50%,” said Chanakya Chakravarti, former head of indirect investments, Asia Pacific, Ivanhoe Cambridge, the real estate arm of CDPQ.
In 2023, foreign inflows rebounded with a 20% year-on-year increase, reaching $3.6 billion. Although income-yielding office assets continue to be the top choice, renewed interest is anticipated in residential, industrial and alternative assets.
Alta Capital, sole operating partner of Hillhouse backed Rava Capital in India has committed over $1 billion across multiple transactions – Table space, Capeella Educore, Pragati Warehousing, and Good Host Spaces.