Indian real estate observed three-fold rise in foreign institutional investments during 2017-22

India acquired foreign institutional payments worth USD 26.6 billion into real estate over the six-year period from 2017 to 2022, a three-fold growth from the before six-year period, according to Nasdaq-listed investment management company Colliers.

Foreign investments in India have been on the rise over the last few years as the industry underwent an overhaul, with major structural, policy reforms inducing transparency and ease of business operations, according to Colliers' 'India- High on Investors' Agenda' report.

The report delves into the factors that make India a preferred choice for global investors and how it has stepped ahead of other emerging economies.
According to the report, foreign investments accounted for a sizeable share of 81 per cent of the total investments in real estate during 2017-22.

"The country's investor-friendly FDI policies, increased transparency in deal structures, and higher investment limits through the direct route have encouraged global investors to invest in India's real estate sector," Colliers said.

Institutional investments in real estate continued to remain upbeat in January-March 2023 as well, rising by 37 per cent year-on-year at USD 1.7 billion, led by the office sector.

"India's favorable demographic indicators, deep digital talent pool, developmental government policies, infrastructure advancements and competitive costs have made it one of the top choices for global enterprises, fueling real estate demand in India. The strong economic and business fundamentals are enhancing institutional investors' sentiments; forging strategic partnerships to expand their portfolios," said Sankey Prasad, Chairman and Managing Director at Colliers India.

From the perspective of global and Asia Pacific investors, the Indian property market currently offers attractive pricing, better valuations, and higher yields on assets.

At the Asia Pacific level, India has become a preferred investment destination as Indian cities offer higher yields compared to other cities in the region at relatively lower pricing points. Major Indian cities like Bengaluru and Mumbai occupy the second and third positions, respectively, in terms of commercial yield on real estate assets across the region.