Institutional Investments in Indian Real Estate Sector Amounts to $4.3 Billion in 2021

In 2021, the Indian real estate sector attracted institutional investments worth $4.3 billion from various entities, which include family offices, privately owned equity firms, sovereign funds, and pensions. This is, however, 14% lower than the previous year.

There was a significant recovery in investments in 2020. This was primarily due to the couple of sizable portfolio deals that accounted for $3.2 billion in the previous quarter. Besides, in 2021, the investments happened to be broad-based. Experts reveal that one of the prime aspects leading to a decrement in investment volume was the consistent breakdown in the process of investment as a result of the second wave of the pandemic.In the third quarter of the year, there were signs of recovery in the investment climate. Due to the onset of the new virus variant, there was an uncertainty about what impact it would have on the closure of deals.

Apart from these numbers, one could spot a clear indication of a broad-based recovery. The investor sentiments were turning positive across different classes of assets. In 2022, there would be a much stronger comeback for the real estate sector in India.

In 2020, there were 27 deals in the segment, whereas the number soared to 57 in 2021. Besides, there was a diversification of investments in 2021. With the third wave of the pandemic bringing in restrictions, the momentum of investments had an adverse impact during the fag end of the year. Evidently, the year 2021 showed how the investment could be diversified across different classes of assets, unlike that in 2020. Besides, the residential real estate market had a strong comeback during this time. It had 25% share of the overall market, accounting for the second-highest investment avenue.

At $1.08 billion, investment in the residential sector was 2.3 times greater in 2021, as compared to just $460 million in the previous year. The sharp recovery largely led to this renewal in interest, and there was a strong growth in sales by 47% in the first three quarters of the year, as compared to 2020.