Affordable housing, logistics to get a boost from SWFs
Real Estate

Affordable housing, logistics to get a boost from SWFs

The measures announced recently in the Union Budget granting 100 per cent tax exemption on interest, dividend and capital gains income to Sovereign Wealth Funds (SWFs) investing in infrastructure, will further help boost investments in affordable housing and logistics, says JLL Research. India seems to have gained a major impetus following some positive policy backing and the ecosystem in general thus helping boost the image of the country as a favorite with SWFs.

Sovereign Wealth Funds are state-owned investment funds commonly established with revenues generated from trade surpluses, central bank reserves, currency operations, privatisations and transfer payments. Between 2008-2018, global Assets Under Management (AUM) of SWFs grew at a CAGR of 10 per cent with Asia, garnering the highest share (42 per cent). 

“Sovereign wealth funds have been playing a pivotal role in investments globally with estimated AUM of 8.1 trillion as of 2019. Investments by SWFs in India improved sharply as a result of various policy measures introduced to attract foreign investments. The Union Budget for 2020 has further incentivised SWFs to invest in infrastructure including affordable housing and warehousing by providing tax exemptions. The rise in potential returns is expected to drive more SWF investments in India. SWFs would be more inclined to use the direct investment route as compared to investment platforms,” said Ramesh Nair, CEO and Country Head, JLL India.

India emerging as the favourite destination for SWFs 

Investments by SWFs improved sharply as various policy measures were introduced to attract foreign investments. In India, SWFs hold US$ 29 billion of Assets Under Custody (AUC) as of December 2019. Of these, real estate and warehousing account for 22 per cent of the AUC, amounting to US$ 6.6 billion. 

“SWF Investments quadrupled to US$ 5.3 billion during 2014-19 from US$ 1.3 billion recorded between 2005 and 2013, due to various reforms introduced in the real estate sector. Going forward, we expect more traction from this type of patient capital,’ said Dr Samantak Das, Chief Economist and Executive Director, JLL India.



The Union Budget for 2020 further incentivises SWFs to invest in infrastructure by providing them a 100 per cent tax exemption on interest, dividend and capital gains income in respect of investment made in infrastructure and other notified sectors before March 31, 2024, with a minimum lock-in period of three years. 

The resultant increase in potential returns is expected to boost investments by SWFs in affordable housing and logistics and warehousing which have been accorded infrastructure status. 

The measures announced recently in the Union Budget granting 100 per cent tax exemption on interest, dividend and capital gains income to Sovereign Wealth Funds (SWFs) investing in infrastructure, will further help boost investments in affordable housing and logistics, says JLL Research. India seems to have gained a major impetus following some positive policy backing and the ecosystem in general thus helping boost the image of the country as a favorite with SWFs.Sovereign Wealth Funds are state-owned investment funds commonly established with revenues generated from trade surpluses, central bank reserves, currency operations, privatisations and transfer payments. Between 2008-2018, global Assets Under Management (AUM) of SWFs grew at a CAGR of 10 per cent with Asia, garnering the highest share (42 per cent). “Sovereign wealth funds have been playing a pivotal role in investments globally with estimated AUM of 8.1 trillion as of 2019. Investments by SWFs in India improved sharply as a result of various policy measures introduced to attract foreign investments. The Union Budget for 2020 has further incentivised SWFs to invest in infrastructure including affordable housing and warehousing by providing tax exemptions. The rise in potential returns is expected to drive more SWF investments in India. SWFs would be more inclined to use the direct investment route as compared to investment platforms,” said Ramesh Nair, CEO and Country Head, JLL India.India emerging as the favourite destination for SWFs Investments by SWFs improved sharply as various policy measures were introduced to attract foreign investments. In India, SWFs hold US$ 29 billion of Assets Under Custody (AUC) as of December 2019. Of these, real estate and warehousing account for 22 per cent of the AUC, amounting to US$ 6.6 billion. “SWF Investments quadrupled to US$ 5.3 billion during 2014-19 from US$ 1.3 billion recorded between 2005 and 2013, due to various reforms introduced in the real estate sector. Going forward, we expect more traction from this type of patient capital,’ said Dr Samantak Das, Chief Economist and Executive Director, JLL India.The Union Budget for 2020 further incentivises SWFs to invest in infrastructure by providing them a 100 per cent tax exemption on interest, dividend and capital gains income in respect of investment made in infrastructure and other notified sectors before March 31, 2024, with a minimum lock-in period of three years. The resultant increase in potential returns is expected to boost investments by SWFs in affordable housing and logistics and warehousing which have been accorded infrastructure status. 

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code