Indian real estate sector likely to register USD 4.8 bn institutional flow of funds in 2020: JLL
- Investors remain most bullish on domestic office market
- Bengaluru, Chennai and Mumbai together accounted for 71% share of the total investments made in the first nine months
- Success of two listed REITs helping investors to (re)imagine real estate investments
Mumbai, 03 November, 2020: India’s real estate market attracted USD 235 mn in capital in the third quarter of 2020 (Q3,2020), growing by 52% quarter-on-quarter (QOQ), according to JLL’s ‘India Capital Markets: A Real Estate Perspective’ report released today. The India real estate sector is expected to draw USD 4.8 bn of capital in 2020, representing a 8% decline on 2019’s total transactional volume of USD 5.3 bn.
According to JLL, investors are most attracted to the country’s office sector, with interest remaining strong throughout the pandemic and the partial relaxation of the lockdown with USD 200 mn invested during Q3 2020. Concurrently, global investors actively sought asset portfolio opportunities, with two landmark portfolio transactions amounting to a total of USD 3.6 bn in investment value likely to be concluded in Q4 2020. In the primary markets, Mindspace Business Parks REIT- India’s second REIT issue of USD 600 mn was oversubscribed by 13 times in August 2020. The strong response to this REIT indicates a preference for cash flow opportunities in private and public markets.
“We’re expecting a broad based ‘V-shape’ recovery in the Indian real estate market, but depending on the economic recovery and pandemic response, our estimates have substantial scope for upward revision. We have already witnessed very positive signs of recovery in the office segment in Q3 with gross leasing at 13.8 mn sq. ft. The REITs market has done exceedingly well with the combined market cap of the India REITs at USD 6 bn accounting for 33% of the market cap of listed real estate companies,” said Ramesh Nair, CEO and Country Head (India), JLL.
Office assets remain the preferred choice