FICCI and Vestian launched a report titled Real Estate Investment in India: A Brief Analysis that portrays the investment scenario in the real estate industry. The report was launched at the FICCI Conference on Real Estate Financing in Mumbai today and talks about the evolution of the real estate sector and the investment scenario thereof. The insights of the report show a major shift in the investment landscape of the real estate sector and its journey from a heavy dependence on banking credit for financing requirements to now, where nearly 80% of the institutional investment is accounted for by private equity investors.
The period from 2015-2018 observed the highest amount of traction in real estate investment in the country and this momentum continues in 2019 as well. The years from 2015-2018 had investments worth USD25.7 billion being recorded. 2018 was the most popular year and had investments worth USD 7.2 billion, the highest in over a decade. The trend has further continued into 2019 too; and the year has already seen investments to the tune of USD 2.7 billion being made till the month of June.
The investment climate has become progressively relaxed and conducive for institutional investments that has been helped by a host of reformatory measures such as the Real Estate (Regulation and Development) Act, the Benami Transactions (Prohibition) Amended Act, launch of Housing for All Mission, and easing of FDI rules, leading to increasing adoption of best practices and transparency
Dr. Shrinivas Rao, CEO – APAC, Vestian says, ‘Real estate is one of the most fundamental and influential sectors impacting the overall growth of a country’s economy. A robust and well catered real estate sector assists in strengthening a host of other ancillary sectors and is significant for a growth economy such as ours. This report, we believe, would not only go a long way in addressing regulatory challenges but also help reflect on directional way ahead for the sector’.
He further adds, ‘one of the major trends observed in the last decade has been the rise in institutional investment in real estate, particularly PE investment that has been a key factor in keeping the market confident about its revival. This investment interest from the institutional segment is bound to increase further, given the growth in a number of offshoots, such as - co-working spaces, co- living in the rental housing space, Affordable housing and warehousing & logistics.
Mr. Sanjay Dutt, Chairman, FICCI Real Estate Committee & MD and CEO, Tata Realty and Infrastructure Ltd, says, ‘The Indian Real Estate sector is in a state of nirvana with revolutionary reforms playing charm to attract investments and restore confidence in the sector’. Encouraged by the potential of the real estate sector which is clearly indicated in the report, he further says, ‘2019 has started on a positive note with approximately USD 2.7 billion of real estate investments recorded in the first half of the year in various asset classes across the country. Improvement in infrastructure, roads, and metros coupled with the increased speed of technology implementation (eg. 5G) will be impactful game changers for the sector and will improve the investor interest in the sector. The launch of India's first Real Estate Investment Trust (REIT) is another positive move for the sector further building confidence amongst global real estate investors to invest in India’.