Commercial real estate investments at $1.35 bn in Q1 FY21
Real Estate

Commercial real estate investments at $1.35 bn in Q1 FY21

As per the JLL's 'Capital Markets Update Q2 2021' report, the Indian commercial real estate market drew $1.357 billion of investments from institutional investors in the April–June quarter of 2021.

The report said that the capital deployments in the April-June period described the most active second quarter in five years.

Radha Dhir, CEO and Country Head, India, JLL, told the media that despite the second wave of Covid-19 impacting India in April this year, the first six months of 2021 witnessed investments of $2.7 billion that is 53% of the total investments observed in 2020.

According to her, investors are displaying resilience and are adjusting to the unpredictable environment. Easing lockdowns during the first three months of 2021 also provided investors with a first-hand experience of the post-pandemic environment. It resulted in risk re-rating, and asset allocations observed a subsequent shift in Q2 2021.

The speed and volume of investments since the past decade has been backed by the introduction of Real Estate Investment Trusts (REITs) in 2014, the Real estate Regulation and Development Act in 2016 (RERA), Benami Transactions (Prohibition) Act and progressive relaxation in foreign direct investment measures over the years.

She said that the first half of 2021 observed broader investor participation and, though the economic dip produced by the second wave will result in a slower increase in 2021, investments in real estate are anticipated to keep momentum.

The most significant beneficiary during the pandemic has been the warehousing and logistics sector since it drew total investments of over $1 billion during Q2CY2021.

According to the report, warehousing accounted for 55% share while retail accumulated 20% of total investments during the quarter.

Dr Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, said that additionally, the data center industry has been attracting strong operator and investor attention with several funds exploring entry strategies.

Investments in the logistics and warehousings sectors were engaging due to the growing shift to online shopping from discretionary to essentials. The significant global funds have invested with warehousing developers and operators as scale and regional footprint are the fundamental differentiators in the sector, the report said.

The report also observed that there has been a change in investment strategy from specific assets to platform type investments as marquee developers have led to a shift from asset and region to the portfolio approach.

Since most warehousing, and retail assets, are placed in tier 2 and 3 cities apart from major metros, the share of ’Pan-India’ has been getting fame, it said.

Defensive sectors like warehousing and data centers are expected to obtain center stage, while office assets will gain attention with more visibility on work from office trends.

Additionally, the REITs market is anticipated to get a further increase as the decrease in lot size of REIT units is likely to drive more retail participation. The growth prospects of the data centers are likely to attract capital at the development stage with ambitious expansion plans by the data center players. Institutional investors have passed the litmus test of resilience during pandemic resurgence and are likely to invest more capital in 2021, the report added.

Image Source


Also read: Homes sales take a hit as second wave derails demand recovery in Q2

Also read: Property registrations in Indore recorded a 60% jump in June

As per the JLL's 'Capital Markets Update Q2 2021' report, the Indian commercial real estate market drew $1.357 billion of investments from institutional investors in the April–June quarter of 2021. The report said that the capital deployments in the April-June period described the most active second quarter in five years. Radha Dhir, CEO and Country Head, India, JLL, told the media that despite the second wave of Covid-19 impacting India in April this year, the first six months of 2021 witnessed investments of $2.7 billion that is 53% of the total investments observed in 2020. According to her, investors are displaying resilience and are adjusting to the unpredictable environment. Easing lockdowns during the first three months of 2021 also provided investors with a first-hand experience of the post-pandemic environment. It resulted in risk re-rating, and asset allocations observed a subsequent shift in Q2 2021. The speed and volume of investments since the past decade has been backed by the introduction of Real Estate Investment Trusts (REITs) in 2014, the Real estate Regulation and Development Act in 2016 (RERA), Benami Transactions (Prohibition) Act and progressive relaxation in foreign direct investment measures over the years. She said that the first half of 2021 observed broader investor participation and, though the economic dip produced by the second wave will result in a slower increase in 2021, investments in real estate are anticipated to keep momentum. The most significant beneficiary during the pandemic has been the warehousing and logistics sector since it drew total investments of over $1 billion during Q2CY2021. According to the report, warehousing accounted for 55% share while retail accumulated 20% of total investments during the quarter. Dr Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, said that additionally, the data center industry has been attracting strong operator and investor attention with several funds exploring entry strategies. Investments in the logistics and warehousings sectors were engaging due to the growing shift to online shopping from discretionary to essentials. The significant global funds have invested with warehousing developers and operators as scale and regional footprint are the fundamental differentiators in the sector, the report said. The report also observed that there has been a change in investment strategy from specific assets to platform type investments as marquee developers have led to a shift from asset and region to the portfolio approach. Since most warehousing, and retail assets, are placed in tier 2 and 3 cities apart from major metros, the share of ’Pan-India’ has been getting fame, it said. Defensive sectors like warehousing and data centers are expected to obtain center stage, while office assets will gain attention with more visibility on work from office trends. Additionally, the REITs market is anticipated to get a further increase as the decrease in lot size of REIT units is likely to drive more retail participation. The growth prospects of the data centers are likely to attract capital at the development stage with ambitious expansion plans by the data center players. Institutional investors have passed the litmus test of resilience during pandemic resurgence and are likely to invest more capital in 2021, the report added. Image Source Also read: Homes sales take a hit as second wave derails demand recovery in Q2 Also read: Property registrations in Indore recorded a 60% jump in June

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