Foreign investments in Indian real estate grows to 82% from 2017–2021

According to NITI Aayog, the Indian real estate sector will reach USD1 trillion by 2030

Foreign investors have expressed great interest in Indian real estate in 2017 up until 2021, causing capital flows to jump three-fold and reach USD24 billion, according to a Colliers-FICCI report featured in Deccan Herald.

They used to avoid investing in Indian real estate because of the lack of transparency but started in 2017 and had increased optimism from there. From 2017 to 2021, shares climbed to 82 percent, which surpassed the 37 percent rate from the preceding five-year period.

The office sector saw a large increase in foreign capital flows, underpinned by strong demand for Grade A office space and exit options such as REITs. The industrial and logistics sectors also surpassed the residential sector.

“Demand for alternative assets including life science labs, data centres, flex spaces have grown during the pandemic as investors seek new avenues for growth and returns. Data centres garnered a maximum share of 52 percent of foreign investments in alternatives in [the] last five years. Lack of income-producing data centre assets in key locations and scope for future REIT listings will push investors to form new platforms for development opportunities,” said Vimal Nadar, Senior Director, Research, Colliers India.

In 2022, India’s real estate sector is seeing robust growth in demand, which is likely to continue throughout the year, shared Times of India. 

According to NITI Aayog, the real estate sector will reach USD1 trillion by 2030, accounting for 13 percent of the country’s GDP. 

This year, India’s residential segment is expected to rise by roughly 5 percent in capital value. Sales momentum will pick up in 2022 as prospective homebuyers continue to favor larger homes with more amenities and attractive pricing.

Moreover, when work resumes in offices, the commercial sector’s rebound and the flight-to-quality trend are likely to keep rents stable and even climb in 2022.

More: India’s commercial real estate market calls for investors

The luxury housing market is also expected to reach new heights.

The real estate business, which is already the third-largest contributor to economic growth, is predicted to keep growing in 2022.

The Property Report editors wrote this article. For more information, email: [email protected].