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This article is more than 4 month old.

Real estate investment tops $1.35 billion in April-June quarter: JLL

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"Despite the second wave of COVID hitting India in April this year, the first six months of 2021 saw investments of $2.7 billion which is 53 percent of the total investments seen in 2020," said Radha Dhir, CEO and Country Head, India, JLL.

Real estate investment tops $1.35 billion in April-June quarter: JLL
The Indian commercial real estate market attracted $1.357 billion of investments from institutional investors in the April – June quarter of 2021, representing a ninefold increase year-on-year, according to JLL's 'Capital Markets Update Q2 2021' report.
The capital deployments in the April-June period represented the most active second quarter in five years, the report said.
"Despite the second wave of COVID hitting India in April this year, the first six months of 2021 saw investments of $2.7 billion which is 53 percent of the total investments seen in 2020," said Radha Dhir, CEO and Country Head, India, JLL.
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According to her, investors are showing resilience and are adapting to the uncertain environment. "Relaxing lockdowns during the first three months of 2021 also gave investors a first-hand experience of the post-pandemic world. This led to risk re-rating and asset allocations witnessed a subsequent change in Q2 2021," she said.
The pace and volume of investments over the past decade have been supported 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 norms over the years.
"The first half of 2021 saw broader investor participation and although the economic dent created by the second wave will lead to slower growth in 2021, investments in real estate are expected to maintain momentum. From where we stand, institutional investors have passed the litmus test of resilience during pandemic resurgence and are expected to commit more capital in 2021," she added,
The biggest beneficiary during the pandemic has been the warehousing and logistics sector as it attracted total investments of over $1 billion during Q2CY2021. Warehousing accounted for 55 percent share while retail formed 20 percent of total investments during the quarter, as per the report.
"In addition, the data center industry has been drawing strong operator and investor interest with various funds exploring entry strategies," said Dr Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.
Investments in the warehousing and logistics sectors were attractive due to the increasing shift to online shopping from discretionary to essentials. Major global funds have invested with warehousing developers and operators as scale and regional footprint are the key differentiators in the sector, the report added.
The report also noted that there has been a shift 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, as well as retail assets, are also located in tier 2 and 3 cities apart from major metros, the share of ’Pan-India’ has been gaining prominence, it said.
Going ahead, though the economic dent created by the second wave will lead to slower growth in 2021, investments in real estate are expected to stay strong through the year. Defensive sectors like warehousing and data centers are likely to gain center stage, while office assets will gain interest with more visibility on work from office trends.
Additionally, the REITs market is expected to get a further boost as the reduction in lot size of REIT units is expected to drive more retail participation. The growth prospects of the data centers are expected 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 expected to commit more capital in 2021, the report added.
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