Asian investor share in Indian real estate rises to 47% in 2023

Asian Investors Dominate Indian Real Estate Market

The share of Asian investors in the Indian real estate market has significantly increased from 15% in 2019 to 47% in 2023, according to data from Savills India.

Resilience and Growth in the Indian Real Estate Sector

Despite occasional disruptions and sporadic inflation, India has demonstrated resilience, outpacing comparable economies with a growth rate of 7.2% in FY23 and promising projections for the future. The real estate sector, constituting about 7.3% of India’s GDP, has undergone notable transformations, especially in its financing landscape post-pandemic, with renewed confidence from private equity funds.

“To drive further growth, we must expand our asset pool and enhance the investor-friendly environment. Simplifying regulations and addressing sector-specific challenges are crucial for boosting investor confidence and unlocking new opportunities. With a promising economic outlook and conducive policies, India’s real estate is sure to tread the growth path,” said Arvind Nandan, Managing Director, Research & Consulting, Savills India.

Private Equity Investments in the Indian Real Estate Sector

Private equity investors have injected USD 10.7 billion (INR 843 billion) into the Indian real estate sector across nearly 100 deals from 2021 to 2023. Transaction volumes have increased by over 25% annually, with investment values rising 13.7% and reaching USD 3.9 billion in recent years.

The average deal sizes during this period have ranged between USD 100-120 million (INR 8.3-9.9 billion). The office segment has secured the majority share of investments at 51%, followed by industrial & warehousing at 20%. Diversification into sectors like data centres, life sciences, and student housing reflects evolving investor preferences.

Diversification into Land Deals

PE institutional investors are increasingly diversifying into land deals. The share of land transactions in overall PE investments surged from 5% in 2021 to 26% in 2023, with a sixfold increase in deal volume during this period. Mumbai remains a key focus for investors, capturing 57% of cumulative land investments during 2021-2023. Tier II cities received USD 167 million (INR 14 billion) of PE investments during this period, highlighting a burgeoning trend of segment proliferation beyond Tier I cities.

Investments in Alternative Segments

Over the past few years, there has been a significant surge in fund allocation to alternative segments such as industrial & warehousing, data centres, life sciences, and student housing. A total of USD 3.1 billion (INR 238 billion) has been invested in alternatives during 2021-2023, constituting about 29% of total investments.

The industrial & warehousing segment dominated investments, capturing a 69% share in the alternatives sector over the last three years, driven by a robust manufacturing sector and e-commerce demand.

Increased Interest from Asian Investors

While the USA and Canada have been primary sources of funds in the past, there is now increased interest from Asian investors, particularly from Singapore, Japan, and Hong Kong.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 17: Partnerships for the Goals

The issues highlighted in the article are related to the growth and development of the real estate sector in India, which has implications for economic growth, infrastructure development, sustainable cities, and partnerships.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all
• Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all
• Target 11.1: By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums
• Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships

Based on the article’s content, these targets can be identified as relevant to the issues discussed.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

No indicators are mentioned or implied in the article that can be used to measure progress towards the identified targets. The article primarily focuses on the trends and investments in the Indian real estate sector without providing specific indicators for measuring progress towards the SDG targets.

4. SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: m.economictimes.com

Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.