According to a report published by JLL, Institutional investments continued the momentum during the first quarter (Jan-March) of 2021, registering 21% growth in volumes at USD 922 million, indicating sustained investor interest in India’s real estate market.
Investments during the quarter were driven by more activity from funds and closed development stage deals and were further supported by external macroeconomic factors. However, the pandemic surge during the second half of March 2021 is expected to delay the investment pipeline in the second quarter, JLL said.
Commercial office assets dominated deals with USD 864 million transacted, translating into 94% of the total value in the first quarter. Office space developers liquidated their portfolios to deleverage or raise growth capital for the next phase of expansion. In addition, investors are actively scouting for warehousing assets at present and deals are likely to be concluded in the coming quarters. The housing sector, meanwhile, continues to experience an infusion of last-mile funding for project completion.
Hyderabad witnessed the highest capital flows of USD 384 million, accounting for a 42% share of investments during the first quarter of 2021, due to the launch of new developments by the Phoenix Group. Mumbai accounted for 21% share of investments with USD 193 million deployed in its office and residential segments, supported by the reduction in stamp duty introduced by the State Government of Maharashtra.