Colliers International Report – Indian real estate sector to attract USD 6.5 billion investment.

This year investment in the property industry in India, driven mainly by a large demand of commercial IT companies’ office properties, is likely to rise by 5% to USD 6.5 billion (around Rs 46,000 crore), according to the global real estate consultant Colliers.

The real estate market gained USD 6.2 billion last year, up 8.7% from 2018 since foreign investors bought several office properties. In 2019, foreign funds accounted for nearly 78% of the total investment. The real estate sector in India has reported influxes of USD 56.6 billion since 2008, according to Colliers.

“Investments in the real estate market in 2019 amounted to USD 6.2 billion (Rs 43,780 crore), and during 2020, Colliers estimated the investments in the real estate industry with a total inflow of USD 6.5 billion,” the report said.

In the next three years, the consultant expects investors to continue to be committed to commercial office assets with strong demand and prospects for further rental appreciation. “We are intending to account for some 40% of inflows in the commercial office sector in 2020,” said Colliers.

In total, 46% of the total inflows in 2019 were at USD 2.8 billion (Rs 19,900 crore) for commercial office properties.

The consultant has said that the interest of investors has grown because of plenty of reforms, such as the enforcement of the Real Estate Regulatory Authority, adoption of the Goods and Services Tax (GST), the enactment of the Insolvency and Bankruptcy Code and relaxation of foreign direct investment standards.

Colliers suggested that investors exploit opportunistic investments, including properties under construction offices, backed by competitive demand in IT-led markets such as Bengaluru, Hyderabad and Pune.

“Investors must continue to take a conservatory approach to residential assets in general, compared with commercial assets as a result of the sustained downturn in this market,” the report says.

Coliving would attract considerable attention from investors as rental demand increases among professionals who move to cities with opportunities for employment, said the consultant.

Investors are also active in the warehousing, retail and coworking divisions.