'Chennai, Delhi-NCR, Mumbai absorb max of realty investments'

CHENNAI: Capital inflows in H1 2022 jumped by 42% over H2 2021 and 4% compared to H1 2021. On a quarterly basis, the capital inflows in Q2 2022 stood at $2 billion, an increase of 47% over Q1 2022.

Delhi-NCR, Chennai and Mumbai dominated total investment quantum in Q2 2022, with a cumulative share of about 90%, as per ‘India Market Monitor – Q2 2022’ from CBRE South Asia, a real estate consulting firm. The report highlights the growth, trends and dynamics across all segments of the real estate sector in India.

According to the report, institutional investors led investment activity with a share of nearly 65%, infusing liquidity primarily in brownfield assets, whereas developers (31%) continued to prioritise greenfield investments. About 70% of the capital inflows were deployed for pure investment or acquisition purposes during Q2 2022, while 30% were committed to development or greenfield projects. The report also highlighted the office sector’s dominance of investment activity, with a share of about 57% - followed by land/development sites (30%) and the retail sector (10%).

Foreign investors accounted for about 67% of the total investment volume in Q2 2022, with investments from Canada garnering a 59% share.

“In 2022, real estate investments are expected to grow further on the back of a strong rebound across asset classes. With total capital inflows reaching $3.4 billion in H1 2022, we expect these investments to rise by over 10% versus the 2021 benchmark. Greenfield assets are likely to witness a strong investment uptick. However, we might feel the impact of volatility in the global investments market,” said Anshuman Magazine, Chairman-CEO, India, South-East Asia, Middle East & Africa, CBRE.

“Leading developers have raised over Rs 18,700 crore ($2.4 billion) through the QIP and IPO routes since FY2019 – something we expect to continue in 2022. With improved financials and stronger residential sales in 2022, we also foresee leading developers being in a much better position to negotiate with institutional investors for funds at a comparatively lower cost,” said Gaurav Kumar and Nikhil Bhatia, Managing Directors for Capital Markets and Residential Business, CBRE India.

“Investments in alternate assets, particularly data centres, could gain further traction amidst rising digitalisation and strong policy push towards a digital economy; sustainability and ESG practices would emerge as stronger themes in investment strategies,” they added.