Divestiture by large builders or developers is expected to witness a four times rise in India’s commercial real estate comprising the institutional funds in 2017. It is likely to reach $3.5 billion which will set a benchmark for these investments.
The coming two years will also see a constant increase of investments in the office segment because of Real Estate Investment Trusts becoming a reality. Under the top markets of property, a huge amount of institutional capital is going behind the restricted fundable office stock of size around 280 million square feet.
The interest which is received from the institutional investors is expected to seep in the retail investors segment when the REITs will be launched in a full-fledged way showing some grip over the market. The list of first Real Estate Investment Trust is speculated to make the process of institutionalization of the sector easier. This investment of instrument will likely will expose the sector to the segment of domestic savings which in turn will bring the globally-acclaimed platforms of funding closer. Secondly, the developers will also be benefitted as they will be able to free the value of their assets.
In the past, private-equity funds have been very popular in being behind the leased assets. Last year, investments were captured at $957 million in the commercial assets which was actually a 6% increase from 2015.
The changing patterns of ownership will bring the required administration and command in this sector. The scene of investment is now identified by a mixture of independent and pension funds, apart from the PE funds.