The property market, which witnessed institutional flow of funds at a 10-year-high in 2018, has seen Asian funds such as GIC, Ascendas-Singbridge and Temasek increasing their direct investments across categories including assets yielding rent.
“India will also see developers investing from balance sheet funds from Asian economies participate in India for asset creation. These developers will not only bring in much-needed equity capitalisation but also real estate expertise and new products,” said Diwakar Rana, managing director-capital market at Savills India, an international property consultancy and brokerage firm.
The market is also expected to see investors looking beyond rent-yielding offices to bet on demand-based sectors such as logistics, warehousing, data centres, co-living and student housing, build-to-core offices and urbanisation projects. Currently, office space accounts for 50% of the overall investment in India.“Investors’ appetite is very strong. There are many funds which are now focusing on income generating assets and are becoming open-ended. There is a lot of opportunity in the Indian market,” said Callum Young, executive director-Asia Pacific (regional investment advisory), Savills.
Institutional investors have picked India’s real sector as one of their strategic investment destinations over the past decade, focusing significantly more in the second half, following the global financial crisis that erupted in late 2008.
“There have certainly been positive changes with regard to laws and regulations that should encourage foreign investment. As some of these funds exit and can show a track record of generating good returns, this will encourage further allocations and potentially direct strategies for those that have the capability,” said Ben Vickery, associate director-South Korea regional investment advisory, Savills.
With the government initiating a series of reforms, institutional investors, including private equity, sovereign wealth and pension funds, and regional Asian developers, continue to show a healthy appetite for Indian real estate.Some of the active funds in the real estate market in the recent years include American fund managers Blackstone and KKR, Canada’s Brookefield Asset Management, CPPIB and Ivanhoe Cambridge, Europe’s APG and Allianz, ADIA and QIA of West Asia, Japan’s Mitsubishi and Singapore’s Temasek, GIC and Ascendas-Singbridge.