After record capital flows to the tune of $7.2 billion in 2022, realty services and investment firm CBRE expects investments in the real estate sector to be steady in 2023, even as investors observe caution on the back of recessionary fears in the US and Europe.
The Indian real estate sector registered a 32% year-on-year growth in investments in 2022, a new report by CBRE revealed on Wednesday.
“The record investment inflows reflect the resilience and growth potential of the Indian real estate sector,” commented Anshuman Magazine, chairman and chief executive (India, South-East Asia, Middle East and Africa) of CBRE. Equity inflows in the sector will continue undeterred by global headwinds, he added.
Furthermore, this year could see the listing of India’s first retail real estate investment trust (REIT) which would widen investment avenues for investors, the report highlighted.
“There is a possibility that some large institutional investors could diversify their portfolios,” said Gaurav Kumar, Managing Director, Capital Markets and Residential Business, CBRE India, predicting that India may potentially see a few new sets of investors in the sector.
Delhi NCR led investment activity in 2022 with a 30% share, followed by Mumbai (25.5%), Bengaluru (11%), Chennai (9.5%), Hyderabad (3.9%) and Pune (3.5%).
Foreign investors accounted for a lion share of the overall investment volume at 57%, led by Canada (37%) and the US (15%). Institutional investors contributed nearly 51% of total investments, followed by developers at 32%.
Land or development sites attracted 48% of the capital inflows within which residential development absorbed 44% while 25% went into mixed-use developments. The office sector absorbed 35% of total investments into the realty sector in the year.