,India

Indian property investment volume records whopping threefold increase in the first three quarters of 2021

Fund flows increased 29.8% to US$0.81b in Q3 alone.

India recorded robust real estate investment volumes throughout 2021. In the third quarter alone, investment volume increased 29.8% y-o-y to INR 59.9 bn (USD 0.81 bn), according to Cushman & Wakefield. 

The analyst adds, “Meanwhile, the investment volume in Q1 – Q3 2021 recorded a stellar ~3x growth compared to the last year. Foreign investors accounted for close to 83% share of the Q3 investments signaling the high appetite for Indian real estate investments.”

Here’s more from Cushman & Wakefield:

Residential assets and data centres took the limelight and garnered the maximum share in the quarterly investments, 33.6% and 30.1% respectively. The credit arm of Bain Capital invested INR 10 bn in premium residential projects of Embassy Group in the largest residential investment in Q3. Puravankara Ltd, Shriram Properties, Hubtown, Vasvani Group, Kumar Properties were other renowned developers that received debt investments, corroborating the trend of investments chasing developers with a good execution track record. 

The investment activity in the residential segment was also complemented with the creation of a platform between HDFC Capital Advisors and Eldeco Group focusing on development of low-rise, plotted development projects in Tier-II cities of National Capital Region. The platform with an initial investment of INR 1.5 bn has identified two projects in Panipat and Faridabad. 

Steady improvement in residential sales activity with the thrust on home ownership can be attributed towards the increasing interest of investors in this space that has been struggling for want of capital since the last few years. At an absolute level, investment volume in the residential segment has grown since the start of the year and the first three quarters cumulatively recorded a sturdy ~2x growth over the corresponding period last year. 

Data centres witnessed investment inflows of INR 18 bn (USD 0.24 bn) across two transactions in Mumbai. Ascendas India Trust has committed INR 12 bn to develop and operate the first phase of its data centre campus in Airoli, Navi Mumbai. In another transaction, Brookfield Infrastructure bought a 30 acres land parcel from K Raheja Corp. in Ghansoli, Navi Mumbai.

Industrial segment that accounted for a 21.7% share of the Q3 investments saw ESR and Xander Investment Management solidifying their positions in the fast growing industrial and logistics space. ESR plans to launch two industrial parks in Kancheepuram and Krishnagiri districts of Tamil Nadu in an MoU signed with the state government. 

The fund also acquired 36.5 acres of land in North Gujarat (Jalisana) to develop a logistics and industrial park. Furthermore, Xander Investment Management acquired 1 msf of warehousing space in Sriperumbudur, Tamil Nadu through its industrial platform.

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