Three-fold jump in foreign investment in real estate

The share of foreign investments in Indian real estate has grown to 82% during 2017-2021, compared to 37% in the preceding five-year period

Foreign capital flows into the Indian real estate jumped more than threefold to nearly $24 billion in five years to 2021 as compared to the previous five years, said Colliers-Ficci report suggesting greater transparency has boosted overseas investors' confidence in Indian real estate.

Foreign investors, who had previously refrained from investing in the Indian real estate market due to the lack of transparency, started investing in the country with greater optimism from 2017.

The share of foreign investments in Indian real estate has grown to 82 per cent during 2017-2021, compared to 37 per cent in the preceding five-year period, data produced by the study showed.

During 2017-21, the Office sector was at the forefront of foreign investments with a 43 per cent share in total overseas investments coming into that. But foreign investors remained cautious about the residential sector after the NBFC crisis.

The investments in the Industrial and Logistics sector surpassed the residential sector.

"Demand for alternative assets including life science labs, data centres, flex spaces has grown during the pandemic as investors seek new avenues for growth and returns. Data centres garnered a maximum share of 52 per cent of foreign investments in alternatives in the last five years. Lack of income-producing data centre assets in key locations and scope for future REIT listings will push investors to form new platforms for development opportunities. In the past five years, capital commitments equating $13.5 bn have been made by global data centre operators, corporates, and investors for the development of data centres in India”, according to Vimal Nadar, Senior Director, Research, Colliers India.

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