The year 2018 is proving to be a turning point for the Indian real estate sector in many ways. With the current government’s renewed focus on affordable housing, game-changing regulatory reforms, and infrastructure status to warehousing, business sentiment has been positive.
Indian real estate has attracted over $4 billion in investments from institutional investors in the year 2018 so far. Average deal size for these investments also crossed $150 million marks making it the highest in the last five years, as per the data showed from KPMG India.
Institutional funding has increasingly become a prominent financing medium, particularly focusing on the commercial real estate sector that has attracted over 60% of investments.
In addition to the commercial real estate, warehousing realty is also turning an attractive avenue owing to supply chain efficiencies, cost savings through the hub and spoke structure, and strong growth momentum being exhibited by sectors such as e-commerce, retail, FMCG and automotive.
Private equity investments into real estate sector during the first half of the year has already grossed more than 60% of such investments witnessed in the entire 2017.
"The real estate sector in India has now entered a revitalisation phase and teething problems posed by various regulatory reforms have started settling in. Landmark regulatory reforms like RERA, GST and REITs etc. are bringing in structural changes promoting transparency, governance, institutional funding, and the industry is moving towards greater customer centricity and technology adoption across the value chain," said Eldeco MD Pankaj Bajaj, President – CREDAI (NCR).
Driven by a push on affordable housing, commercial offices, co-working spaces, rental housing, the sector growth is projected to surpass $650 billion by 2025, with the contribution of about 13% to the Indian GDP and employ over 65 million people.
Average deal size in 2018 has tripled to $157 million from $47 million in 2016. Overall, Mumbai has been the preferred destination attracting 53% or $2 billion of total investments the KPMG report showed. The real estate sector holds considerable significance for the Indian economy as it contributed around 6-7% to the Indian gross domestic product (GDP) in 2017 and is expected to double its contribution by 2025.
Comments
Post a Comment