Why institutional investment in real estate likely to fall this year


What is the concept of real estate?

The land, as well as any permanent improvements, whether natural or man-made, such as water, trees, minerals, buildings, dwellings, fences, and bridges, are all included in real estate. Real estate is a sort of real estate.

So, According to property consultant JLL India, institutional real estate investments may reduce 20% to USD 4 billion this calendar year due to a bigger inflow of capital in 2020. Institutional investment increased to USD 2,977 million in January-September from USD 1,534 million the previous year.

“Unless some big portfolio agreements are not signed by the end of the year,” JLL stated in a statement, “annual investments are likely to be in the USD 3.8-4 billion range in 2021.”

Due to big portfolio deals totaling USD 3.2 billion in the fourth quarter of the year, institutional investments surpassed USD 5 billion in 2020.

“However, the first nine months of 2021 saw a more broad-based rebound, with 31 deals compared to 19 deals in the same period of 2020,” it said.

According to JLL India’s forecast for the coming year, investments will surpass the USD 5 billion thresholds, which the Indian real estate industry saw yearly between 2017 and 2020.

The institutional flow of money includes investments by family offices, foreign business groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, and sovereign wealth funds. It also includes anchor investors in REITs.

JLL India reports that “apart from the office sector, investors continued to devote extra cash to the residential segment, which made a smart recovery, while warehouses and data centers continued to gather investments.”

The retail industry has seen capital pledges from investment platforms that are optimistic about its future possibilities, according to the report. “The success of institutional investments in Indian real estate in 2021 can be summarised in one theme – improved tolerance to unpredictability,” said Radha Dhir, CEO and Country Head, India, JLL.

On the back of a low-interest environment, continuing monetary stimulus, improved revenue visibility across asset classes, and inclusive growth policies, the Indian economy is anticipated to gain further strength and broad-based investment growth, she noted.

REIT listing, distressed possibilities, asset diversification, high-growth data center, and logistics industries, according to Dhir, will fuel investment momentum in 2022.

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