India real estate investments up 8.2% to US$5.56b in 2021

Investments in Q4 alone jumped 57% to US$1.28b.

India’s real estate investment market ended 2021 strong with inflows of INR 93.9 bn (USD 1.28 bn) in the fourth quarter, a 57% q-o-q increase. According to data from Cushman & Wakefield, this brings the annual investment volume to INR 408.5 bn (USD 5.56 bn), reflecting an 8.2% y-o-y growth. 

“Domestic investors accounted for 33.2% of the quarterly investments, compared to a 14.8% share in the last quarter. Debt investments accounted for the majority share of 91.3% of the quarterly investments. On an annual basis, equity investments led the overall volume with a 58.4% share in comparison to a 61.6% share in 2020,” the analyst adds.

Here’s more from Cushman & Wakefield:

At a city-level comparison, Delhi NCR accounted for half of the private equity inflows for Q4, led by the asset acquisition by Brookfield REIT. This was followed by Hyderabad and Chennai with respective shares of 18.6% and 8.3% in the Q4 investment volume. On an annual comparison, Delhi NCR, Mumbai and Hyderabad received the highest investment inflows with respective shares of 16.6%, 12.0% and 11.9%. 

Quarterly investments were led by office and residential segments, accounting for respective shares of 46.0% and 34.7%. Counted amongst large deals during the quarter were Brookfield India REIT acquiring an office asset in Noida; the same company made another large investment in residential through Special Investment Fund by investing INR 10 bn in five under-construction residential projects of Hyderabad-based developer INDIS. 

The uptick in momentum in the residential segment with increasing thrust on home ownership has been drawing interest from institutional investors. The quarter saw investment inflows of INR 32.58 bn (USD 0.44 bn) in the residential segment with an average transaction size of ~INR 2 bn. ASK Property Investment Advisors, Tata Capital, Varde Partners, Motilal Oswal, Kotak Mahindra Investments were among major investors deploying money in residential projects during the quarter. 

On an annual basis, residential investments grew by a robust 2.5X. Annual investments in office segment were recorded at INR 117 bn (USD 1.6 bn), a 60% drop from the last year. Ascendas India Trust, Godrej Fund Management and CPPIB made large investments in office segment in 2021. The year also saw an investment in life science R&D office labs portfolio in Hyderabad as well as an investment in the stressed asset space in Delhi NCR. 

Blackstone Group is planning to list India’s first retail-led REIT in 2022. The REIT portfolio will include mall properties acquired by the investor across cities in the past. Data centres witnessed investment inflows of INR 10 bn (USD 0.14 bn) in the fourth quarter with Kotak Special Situations Fund committing to invest in Sify for development of new data centre facilities in Mumbai, Noida, Chennai, Bengaluru and Hyderabad. The segment which recorded an annual investment volume of INR 28 bn (USD 0.38 bn) saw investments by Ascendas India Trust and Brookfield Infrastructure earlier.