OVER­SEAS IN­VEST­MENTS IN IN­DIAN REALTY IN­CREASE BY 137 PER­CENT

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In­dia, among all emerg­ing mar­kets, has at­tracted the high­est in­ter­est of global in­vestors on ac­count of a stable gov­ern­ment and im­ple­men­ta­tion of path break­ing re­forms such as the Goods and Ser­vices Tax (GST) that would for­malise the econ­omy. This has led to for­eign in­vest­ments in In­dian realty in­creas­ing from USD 3.2 bil­lion dur­ing 2011-13 to USD 7.6 bil­lion dur­ing 2014-16 record­ing a surge of 137 per­cent, says Knight Frank’s Ac­tive Cap­i­tal re­port.

Mum­bai, the fi­nan­cial cap­i­tal of In­dia at­tracted the big­gest pie of for­eign in­vest­ments in 2016, ac­count­ing for at least 39 per­cent of the cap­i­tal flow in In­dian re­al­ity fol­lowed by 32 per­cent by the hot in­vest­ments hubs of Gu­ru­gram and Noida. In­dia’s Sil­i­con Val­ley Bengaluru (11 per­cent) topped the chart among other met­ros fol­lowed by Chen­nai (10 per­cent) and Delhi (4 per­cent). Hy­der­abad ac­counted for 2 per­cent share and Pune an­other 2 per­cent.

Do­mes­tic and for­eign in­vestors, both have started show­ing in­ter­est to­wards of­fice space. For­eign in­vestors are get­ting more in­clined to­wards of­fice space and re­tail. Also, the in­flow of funds from in­vestors into the In­dian real es­tate sec­tor grew by 40 per­cent year-on-year. The in­vestors in­clude – pri­vate eq­uity, pen­sion funds, sov­er­eign funds, do­mes­tics in­vestors, funds from NBFCs, says the re­port. In 2016, in­vestors from the US formed the largest share of in­vest­ments made into In­dia fol­lowed by Canada and Sin­ga­pore. Cana­dian in­vestors par­tic­u­larly the large pen­sion funds have started in­vest­ing in In­dia since 2015, it says.

Ac­count­ing for more than 40 per­cent of the in­vest­ments, the US held the largest share of for­eign in­vestors fol­lowed by Canada (18 per­cent) and Sin­ga­pore (17 per­cent). Cana­dian in­vestors largely the pen­sion funds for­ayed into In­dia since 2015.

The sec­tor-wise anal­y­sis for in­vest­ments in 2016 showed that for­eign in­vestors were mostly lured by of­fice spa­ces and the re­tail sec­tors. Col­lec­tively, the two seg­ments ac­counted for 72 per­cent of the in­vest­ments, says the re­port. The find­ings were sync with over­all global pro­jec­tions which showed that over­seas in­vestors were look­ing be­yond global Su­per Cities. The re­port added that more than 30 per­cent of the to­tal global real es­tate trans­ac­tions will be cross border by 2018.

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