Hyderabad: Hyderabad leads institutional investments in real estate with 42 per cent share, followed by Mumbai at 21 per cent during the first quarter (January-March) of 2021. The city saw the highest capital flows of $384 million (about Rs 2,860 crore), due to the launch of new developments by the Phoenix Group.
Hyderabad witnessed a significant jump in investments year-on-year with the city recording an investment of $100 million (over Rs 740 crore) during the first quarter of 2020. The city then accounted for over 13 per cent of the country’s total investments.
Mumbai garnered $193 million (about Rs 1,440 crore), deployed in its office and residential segments, supported by the reduction in stamp duty introduced by the Government of Maharashtra.
Institutional investments continued the momentum during the first quarter of 2021, registering 21 per cent growth in volumes at $922 million (about Rs 6,880 crore), indicating sustained investor interest in India’s real estate market, according to JLL’s Capital Markets Update Q1 2021.
Investments during the quarter were driven by more activity from funds and closed development stage deals and were further supported by external macroeconomic factors. However, the pandemic surge during the second half of March 2021 is expected to delay the investment pipeline in the second quarter, JLL observed.
“Institutional investment momentum continued during the first quarter of 2021, registering 21 per cent growth in volume at $922 million, indicating the sustained investor interest in India’s real estate market,” said Dr Samantak Das, chief economist and Head of Research & REIS (India), JLL.
JLL predicts that investors are likely to continue evaluating deals and concluding investment processes with relaxation in conditions. It believes that the listing of more REITs will gather pace in 2021, influencing the investment momentum. Apart from commercial office space, recovery in the housing sector is expected to attract funds, especially for projects in the last stages of completion.
Residential sales in Q1 (January-March) 2021 recovered to more than 90 per cent of the volumes witnessed in Q1 2020 (pre-Covid) across the top seven cities. Smart recovery in demand in 2021 is expected to improve investment prospects.
Opportunities for construction finance and last-mile funding would be available. Entry of new data centre operators and expansion plans of major players supported by infrastructure and PE funds are expected to drive further deals. Platform deals in the logistics sector are likely to remain active as the segment benefitted from growing e-commerce demand as well as pandemic induced demand for cold storage facilities from the pharma sector.
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