$3.4 Bn Capital Invested in Indian Real Estate Sector in H1 2022

Although the economy decelerated to some extent in the second quarter of 2022, the year proved to be a good time for the real estate sector in India. All the sectors projected a strong growth, and there were leasing activities on both a quarterly and annual basis. Thanks to the economic boom in real estate, the first half of the years witnessed the inflow of investments worth $3.4 billion. Experts believe that the demand for properties had gradually pent up during the pandemic. Now that the worst is probably over, investors are acquiring the properties. Although signs of inflation are strong in the economy, the real estate sector looks in good shape.

The massive investment in the real estate sector in India marks a spike of 42% on half-yearly basis. On a YoY basis, this is a 4% increment. The capital inflow in the second quarter of 2022 stands at $2 billion. Compared to the first quarter of 2022, this is a 47% increment. The investment was mainly concentrated in cities like Mumbai, Chennai, and Delhi-NCR.

For institutional investors, here was an active investment in this sector, as they accounted for 65% of the overall contribution. Chipping in with a 31% contribution, developers focused on greenfield investments. Among the overall capital inflows, around 70% were allocated for acquisition purposes or pure investments.

One report also showed that the office sector primarily dominates the investments, with a 57% share. On the other hand, development or land sites account for 30%, while 10% of the investments go to the retail sector. Besides, foreign investors made around 67% of the overall investments in the second quarter of 2022. Investors in Canada accounted for as much as 59% of this share.

Evidently, the rebound in the real estate sector is not focused on one particular segment, but across several asset classes. In the coming years, greenfield assets are likely to be in the limelight when it comes to investing. Thanks to the consistent flow of capital, leading developers are coming up with several projects in the residential as well as commercial sectors. This trend would continue to strengthen the real estate sector.