Decoded in charts: Institutional investments in Indian realty halve to $4 bn in 2021 from $8 bn in 2017

NEW DELHI: Institutional investment in Indian real estate has halved from $8 billion in 2017 to $ 4 billion in 2021, shows data from investment management firm Colliers despite increased investor interest in alternative assets such as data centers, senior living, student housing and coliving spaces.

Even though overall real estate investments are down 17% year on year, these alternative assets have witnessed a 26% increase with an inflow worth $500 million in 2021.
Robust technology consumption and data privacy laws will also pave way for further investments in the data centers space, with investors and developers exploring development options, the report added.
.New business avenues such as data warehousing, shared spaces (be it office or residential), and Proptech are likely to see increased investments from fund houses and developers as they emerge as the next growth centres.
Apart from data centers, there is likely to be more focus on greenfield assets in the industrial sector in 2022 led by strong demand from E-commerce companies. The Industrial and warehousing segment saw investments at a five-year high at $1.1 billion. Green financing through green bonds will also see greater acceptance this year in India as developers, asset owners and investors turn their focus to sustainable development. This trend has further been accelerated by the pandemic across geographies, noted Colliers.

The residential sector saw investments of $900 million, the highest in four years, and a 138 percent increase year on year. Investments in industrial and warehousing is up 481 percent on a yearly basis but investments in office is down 43 percent on a year-on year basis.
"The affordable and mid segments accounted for 64% of the investments, signaling this is where the action is. The residential sector will continue to garner investments, both from private-equity players and Grade A developers looking for distressed properties in good locations. Overall, we expect deal-making to pick up post Q1 2022 as concerns regarding the Omicron variant starts subsiding,” said Vimal Nadar, Senior Director and Head, Research, Colliers India.
The luxury segment accounted for about 35% of the total investments in the residential segment. The office sector attracted the highest investments at $1.2 billion, accounting for 31% of the total investments in 2021.
Single-city deals witnessed a twofold increase in 2021, indicating rising preference for high-quality assets in key locations.