Asian investor's stake in Indian real estate soars to 47% in 2023
According to a report by Savills India, it was stated that private equity investors had injected Rs 843 billion into the real estate sector across nearly 100 deals from 2021 to 2023.
It was noted in the report that while the USA and Canada origin funds had been primary sources in the past, there was now increased interest from Asian investors, particularly from Singapore, Japan, and Hong Kong. It was further mentioned that the share of investments from Asian investors had surged from 15% in 2019-2020 to 47% in 2021-2023, indicating rising confidence in the Indian market.
The report mentioned that transaction volumes had increased by over 25% annually, with investment values rising 13.7%, reaching $ 3.9 billion in recent years. Additionally, it was stated that the average deal sizes had ranged between Rs 8.3-9.9 billion during this period.
It was further highlighted in the report that the office segment secured the majority share of investments at 51%, followed by industrial & warehousing at 20%.
In response to limited availability of core assets and growth potential in the Indian real estate market, private equity institutional investors were increasingly diversifying into land deals, as per the report. It was mentioned that the share of land transactions in overall PE investments surged from 5% in 2021 to 26% in 2023, with a sixfold increase in deal volume during this period.
The report emphasised that Mumbai remained a key focus for investors, capturing 57% of cumulative land investments during 2021-2023. It was also noted that Tier II cities received Rs 14 billion of PE investments during 2021-2023.
Finally, the report mentioned that institutional investments in commercial real estate could reach Rs 240 billion annually, potentially funded through private equity, developers' funds, or joint-development efforts.
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