Research

Capital Markets Update | Q3 2020

India witnessed an ebb of investments in real estate during the pandemic period. But this is not the first time that it happened. Find out how different shocks have led to similar reactions and hopes of recovery

December 01, 2020
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India witnessed an ebb of investments in real estate during the pandemic period. But this is not the first time that it happened. Find out how different shocks have led to similar reactions and hopes of recovery.

A look at past upheavals, financial or otherwise indicate a similar pattern of recovery. Post the Global Financial Crisis, investments in Indian real estate declined by 71% during the first nine months of 2009 as compared to the same period in 2008. However, investors after the brief wait came back with lessons learnt. Investments during the first nine months of 2010 saw a recovery of 92%

Investments declined by over 70% during both shocks

Data is for 9 months (January-September) for each year

Source: JLL Research

Investments in Indian real estate resumed growth after a hiatus with the onset of the pandemic. India’s real estate market attracted USD 235 million in capital in the third quarter of 2020, growing by 52 % quarter-on-quarter. Some global investors are scouting for asset portfolio opportunities. Two landmark portfolio transactions amounting to a total of USD 3.6 bn in investment value are likely to be concluded in 4Q 2020.

Unlocking real estate assets can help corporate India retire long term debt of USD 341 bn according to JLL research. The latest data available on RBI’s database of Indian economy financial position of FY 2018-19 reveals that the value of land and building stood at USD 141 bn, which is 41% of the outstanding long-term debt of USD 341 bn. The uncertain economic scenario has forced corporate finance heads to look at real estate assets as a source of funds so that businesses can clear debts.

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