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Real Estate institutional investments down by 17% to $4b in 2021: Colliers India

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Real estate institutional investment volumes closed at $4 billion in 2021, which is a 17 per cent drop y-o-y, according to Colliers India.

The capital flows are said to have come on a broad-based recovery across most asset classes, geographies and doubled in the number of deals compared to 2020. Further, the drop is attributed to the fact that some large transactions had concluded in 2020.

2021 is one of the best years for the industrial and logistics and residential sectors, accounting for about half of the total investments at about $2 billion. The office sector attracted the highest investments at $1.2 billion, accounting for 31 per cent of the total investments in 2021.

Industrial and logistics sector

On the other hand, the industrial and logistics sector was the most sought-after and investments rose to a five-year high of $1.1 billion, which is a five-fold increase from 2020. The sector has been drawing strong operator and investor interest due to increased demand from e-commerce and third-party logistics players post-pandemic.

Colliers India predicts this growth momentum to continue in 2022, as major global investors and developers continue to expand their footprint in proximity to high consumption areas across Tier I and II cities.

“The pandemic has accelerated a number of structural trends and will have lasting changes on the nature of real estate business in India. The investments across asset classes have seen promising inflows in 2021 reflecting several opportunities for investors to recalibrate their strategy towards growth sectors. This is already evident in the rapid investment being allocated towards the residential, increasing development of data centres, alternatives, industrial, office as well as the evolution of the life science sector. There is a reflection of confidence in the industry to participate in the growth story and hence develop, build and own real assets in long term.” said Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India.

Adding to this, Vimal Nadar, Senior Director and Head of Research, Colliers India said, “The year 2021 has seen a strong investor appetite for residential and industrial and logistics sectors while office continues to be dominant. The former breached record highs in recent times lapping up nearly $2 billion of the overall institutional investment volumes. This resonates the strong fundamentals and attractive valuations of the underlying assets supported by a positive economic outlook. The broad-based recovery signals ebullience amongst investors and expansion of REITs, asset diversification, imminent potential in industrial and logistics will keep them busy in the Indian market. Moreover, niche asset classes such as data centres, student housing and life science will provide a unique opportunity for investors to diversify their investments.”



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