Bengaluru has emerged as the top destination for institutional investment in the real estate in 2020 despite the Covid-19 pandemic causing huge disruption in the growth of the sector.
In 2020, Bengaluru witnessed an investment of $3.8 billion in the real estate sector, about 58% of the total money invested in the country. The real estate industry as a whole attracted a total of $6.5 billion investment during the year as against $6.6 billion in 2019. Mumbai stood in the second place.
During 2019, Bengaluru had attracted $2.1 billion investment, about 32% of the total investment attracted by the sector across the country, according to data provided by Vestian Global Workplace Services.
Bengaluru accounted for the highest share of institutional investment in real estate during Q4 2020, to the tune of over 57% of the total investment, followed by Mumbai with 29% share. In the corresponding quarter in 2019, Mumbai had been leading with 58% share of the total investment.
“The past year has seen some of the toughest times in the real estate industry, and in such a scenario it becomes pertinent for institutional investment in the segment to strengthen and keep the market confident about its revival. The fourth quarter of 2020 has come as a ray of light, witnessing several large-sized deals that led to investment quantum soaring during the period”, Shrinivas Rao, CEO-APAC, Vestian Global told DH.
The two largest deals of the country – Brookfield investing $2 billion in RMZ Corp and Blackstone in Prestige Estates ($1.5 billion), are primarily responsible for Bengaluru leading the charts in Q4 2020 as both investee companies have their headquarters as well as the lion’s share of assets in the city.
Contrary to expectations, in a pandemic-induced constricted environment, the period Q4 2020 (October-December 2020) saw an announced investment value of $4.9 billion in the Indian real estate sector. This depicted a significant increase of 195% as compared with the quantum of investment a year ago in Q4 2019.
Another notable point that came to light was the concentration of foreign funds in Q4 2020, their share of investment volume recorded at 98%. The corresponding period in 2019 had shown a relatively lesser share of 89% of total investment being accounted for by foreign funds, the India-dedicated funds accounting for 11% share, Rao said.
The upsurge in institutional investment in real estate during Q4 2020 can be largely attributed to the fact that most of these deals were on hold during the first half of the year, continuing till the third quarter, on account of the insecurities created by the Covid-19 predicament.