Institutional investors in Indian real estate continued to show interest with a total investment worth $5 billion, equivalent to 93 percent of transactions witnessed in the previous year, despite a sudden halt brought on by the pandemic. The annual performance received major support from the fourth quarter`s $3.5 billion investments. The office assets accounted for the major share. The uncertainty over income and yield stability of commercial properties due to the pandemic had led to pulling back in investments. However, large global funds have rather used this as an opportunity to negotiate portfolio deals with developers who offered quality rent yielding assets in cities with a high-quality tenant profile. The recovery has been narrow-based, as 27 deals were transacted in 2020 over 54 in 2019. The two large portfolio deals with an estimated value of $3.2 billion accounted for 65 percent of the total investments in 2020. These investments by large global funds in times of uncertainty validate the investment potential of Indian real estate. India`s office sector has witnessed continuous growth over the last four years with the average annual net absorption crossing 30 million sq ft, leading to steady rentals and capital appreciation till the onset of the pandemic. Global investors, looking for stable yields and regular returns, believe that the technology sector driven office space demand is expected to grow further and keep absorption robust.
Institutional investors in Indian real estate continued to show interest with a total investment worth $5 billion, equivalent to 93 percent of transactions witnessed in the previous year, despite a sudden halt brought on by the pandemic. The annual performance received major support from the fourth quarter`s $3.5 billion investments. The office assets accounted for the major share. The uncertainty over income and yield stability of commercial properties due to the pandemic had led to pulling back in investments. However, large global funds have rather used this as an opportunity to negotiate portfolio deals with developers who offered quality rent yielding assets in cities with a high-quality tenant profile. The recovery has been narrow-based, as 27 deals were transacted in 2020 over 54 in 2019. The two large portfolio deals with an estimated value of $3.2 billion accounted for 65 percent of the total investments in 2020. These investments by large global funds in times of uncertainty validate the investment potential of Indian real estate. India`s office sector has witnessed continuous growth over the last four years with the average annual net absorption crossing 30 million sq ft, leading to steady rentals and capital appreciation till the onset of the pandemic. Global investors, looking for stable yields and regular returns, believe that the technology sector driven office space demand is expected to grow further and keep absorption robust.
