Institutional investment in real estate up by 17% to USD721 million in July-Sep: Report

Institutional Investment in real estate is up by 17% from last year to USD 721 million in the July-September period. Experts believe better allocation of funds in housing, data centre, and warehousing project led to this rise in investment, according to JLL India.

Institutional investment usually comes from family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. These institutional funds also include investment from anchor investors in REITS.

JLL India, a property consultant, said the report is prepared from the information available in the public domain. The investment period was based on the term sheet or transaction announcements which are not from the actual transfer of capital. Data centre investments were also included in the data.

The consultant reported a 17% increase in institutional investments during Q3 2021 (July-September) as investors continued to invest in deals despite uncertainty and disruptions. However, the investment was reduced to 47 per cent on a sequential basis.

Institutional investment in residential sector remained the same at USD 211 million in Q3 2021 periods. While the data centre and mixed-use projects got USD 161 million and USD 137 million investments in funding, against nil investment last year.

Investment by office space has declined significantly to USD 100 million in July-September from USD405 million during the last period.

“Office space transactions have been muted due to a likely delay in the due diligence process and investors gauging the unfolding of work from the office scenario,” the consultant said.

Warehousing and land earned investments of USD 94 million and USD 18 million, respectively, in Q3 2021 as compared to nil investment in the corresponding period of the previous year.

“Close analysts of investments during Q3 2021 reveals that it has been more balanced with the residential sector accounting for 29 per cent of the total investments, followed by alternative sector – Data Centre (DC) accounting for 22 per cent share. The mixed-use project of residential and commercial accounted for 19 per cent of the total investments, said Lata Pillai, Managing Director and Head, Capital Markets, India, JLL.

As per the data, Mumbai saw investment growth in the data centre industry, and capital flow in selected residential projects led to 39 per cent investment growth.

Bangalore reported investment in mixed-use (residential and commercial) projects leading to a 19 per cent share while NCR-Delhi with transactions in the residential and warehousing segment also had the same share.

Institutional investment increased up to USD2, 977 million in the January-September period from USD 1,534 million in the same period last year. The consultant is expecting to see a rise in investment in the fourth quarter this year.

Published By: PTI