Global investors find Indian Real Estate sector opportune for investing

New Delhi, July 19, 2016: The first five months of 2016 have brought with them a substantial private equity investment of about 149 million USD in Indian real estate, thus making it more opportune for global investors. As per a property consultant, JLL, Indian realty estate sector is likely to break its previous record of 2008.

All along the 2008 calendar year, the private investment in realty sector was stationed at USD 267 million.

Shobhit Agarwal, The JLL India Managing Director said in a report, “As of May 2016, the total PE investment into Indian retail real estate stood at USD 149 million or Rs 10 billion. This has beaten most industry experts’ expectations,” JLL India Managing Director – Capital Markets & International Director Shobhit Agarwal said in a report.

The figure has surpassed the investments enticed by Indian realty sector in the year 2007 and might even go on to surpass the previous record year 2008, he added.

Mr. Agarwal said, “PE investment into retail almost dried out after 2008 until the year 2015, with 2012 being the only exception.”

Enunciating that retail real estate sector is opportune for private equity investment, he said the private investment giants would continue to invest in the retail properties for the next six months.

“Economic and political stability, liberalisation of the FDI policy by the government and improvement in the consumer sentiment are some of the factors working in retail and retail real estate’s favour,” Agarwal said.

The superior mall spaces are available with healthy pre-commitments, pointing towards the retailers who continue to remain firm on the long-term India consumption story, said the consultant.

“Looking at the scale of ongoing deals, it seems like PE investment is back into India’s retail sector with a big bang. It also goes on to show how retail real estate is back in favor with the global investor community,” he said.

The report also stated that Singapore- situated GIC invested 149 million USD into Sheath Developers’ Viviana Mall at Thane.

JLL India said that there are some deals, aside from one big deal, in the works. “If any of these go through, 2016 could prove to be a historic year as far as PE investment into the retail real estate industry is concerned.”

Besides Private Equity, residential real estate has also been a favorable area to invest amongst NRIs. The economy has been witnessing positive trends, and the growing population ensures that the demand is going to stay for long. Especially the depreciation of the currency in the past few years and stable political outlook. It is advisable to invest in some locations where properties are affordable currently and are expected to rise in the near future, for example in metropolitan cities. Some great places to invest at present are 4BHK flats in Chennai, Hinjewadi and Kondwa in Pune, and Marathahali Road in Bengaluru.

The policy level initiatives like land acquisition, smart cities, real estate regulator bill, and REITs have also helped in encouraging the key players in the sector. It’s advisable to choose the location and quality of assets wisely before investing in one.

Corporate Comm India (CCI Newswire)