While a significant portion of the investment was committed in the commercial sector, several transactions were also signed in the residential segment.
Mumbai, the country’s financial hub, ranks second with a 16% share in H1 2022 compared to 33% in H1 2021.
Bengaluru, being the top office market in the country, remained in third place. The majority of the investments committed were intended for the commercial segment followed by the residential segment.
Furthermore, Chennai accounted for 7% of the total investment share in the first half of 2022, while Hyderabad and Pune recorded no individual investment in the first half of the year.
The other Tier II cities also had a 7% share in the investment distribution in the first half of 2022. Cities such as Chandigarh, Lucknow, Ludhiana, Becharaji and Zirakpur attracted strong investor interest in the first half of the year. ‘year.
While global concerns over the Omicron wave have now subsided, the first half of 2022 maintained relative caution as institutional investors opted to wait until the turmoil caused by the multiple waves subsided.
The period remained realistic and saw several important transactions being signed, particularly in the commercial, residential and life sciences sectors. The continued pull of institutional investment in real estate over the period implies that investor confidence has remained fairly consistent despite the economic downturn, inflationary pressures and the ongoing pandemic.
Despite the apprehension around the future of the real estate sector following the economic crisis, sectors such as commercial and residential assets continued to offer favorable investment prospects in the first half of 2022.
With increased return to office and robust supply in the pipeline in the coming period, the sector is expected to see better demand than in previous pandemic-hit years, opening up increased investment opportunities.
With customers willing to go out and shop and socialize, the retail sector is also reviving with renewed vigor across India.
Meanwhile, encouraged by the strong performance of operational REITs despite the pandemic and the strengthening of portfolios in various asset classes, structural REIT themes should emerge, and we expect more retail, warehousing and and hospitality in REIT offerings over the coming period.
Investors increased their exposure to emerging asset classes such as data centers and life sciences during the first half of the year.
Institutional investments during the first half of 2022 were recorded at $2.3 billion compared to $3.2 billion of investments observed in the first half of 2021, a decrease of 28% compared to the amount of the first half of 2021.
Repeated waves of the pandemic, coupled with rising inflation and uncertainty caused by global headwinds, have created a greater impact on the Indian market, leading to a cautious approach taken by investors in the Indian property market .
Interestingly, despite the significantly reduced amount of investments in the sector, the average deal size in the first half of 2022 was recorded at $118 million, a 14% increase compared to the average deal size in the first half of 2021 .
Foreign funds accounted for the lion’s share of 84% in the first half of 2022, signifying the increased interest of foreign investors due to the ease of doing business and various other reforming changes in the country in recent times.
Multi-city transactions ranked first among institutional investments, its share increasing to 36% in the first half of 2022 from 30% in the first half of 2021, while on an individual city basis, NCR represented the maximum amount of real estate investment in the second half of 2022, attracting 21% of total investment.
Institutional investments in the second quarter of 2022 were recorded at USD 1.3 billion, a decrease of 9% compared to the amount of investments during the prior year period of the second quarter of 2021, mainly due to the slowdown in economy in the country and global headwinds. geopolitical conditions creating an uncertain environment.
As with the semi-annual trend, the majority of investments during the second quarter of 2022, up to 86%, came from foreign funds, while the share of domestic investors was limited to 14%.