Capital Markets Update Q2 2022

Global capital markets are bracing new uncertainty created by the geopolitical situation which has panned out unintended outcomes. It has led to globalisation of inflation, supply chain issues, currency volatility and capital outflows. The efforts by various central banks to rein in inflation by raising interest rates along with liquidity measures have raised questions over economic growth. Investment managers are waiting to deploy large dry powder in this uncertain scenario with increasing interest rates raising the returns benchmark.

Indian economy was also impacted by the global headwinds. However, the inherent strength of the economy has helped to maintain the growth momentum. Indian real estate continued to witness growth across segments during H1 2022 and is likely to maintain the trend. Investors are expected to remain optimistic about the emerging real estate scenario and commit more capital across asset classes. While office assets would be the preferred choice, the residential segment is expected to see more investor interest. Warehousing and Data Centres are expected to see competitive cap rates on the back of increased investor interest. Another asset that is slowly piquing investor interest is Life sciences. With more and more developers looking at the prospect of developing life science assets and conducive macroeconomic factors in place, we expect this sector to start seeing more activity soon.