PEE Investments in Real Estate Sector to Cross $100 bn by 2026

When Prime Minister Narendra Modi has gone extra miles to make India a lucrative destination for investment to attract the world leaders at World Economic Forum, the real estate industry in India is supposed to garner huge interest from foreign leaders, according to a survey. A property consultant JLL has reported that the Indian realty sector is expected to attract investment up to $100 billion by 2026. 

Previous Record
Over the past 12 years, India has reported to attract $42 billion of investment in real estate. Experts have expected to witness return of over $58 billion in the next 10 years. Debt real estate investments and private equity have seen the growth of $4.18 billion in 2017 in 79 transactions as compared to $3.73 billion in 138 transactions in the year 2017, according to the reports.

Leading investors, including Canada Pension Plan Investment Board (CPPIB), GIC Pte. Ltd and The Xander Group has made investment in the real estate market in India over the past year. The residential sector has always been on low priority for them as they remained cautious of ever-leveraged real estate developers.

Attractive sectors
The private equity reportedly inflows in over the last three years, i.e. from 2014 to 2017, and it grew by 150% in IT industry with great attraction to the office sector. Despite the fact that residential sector has been one of the highly invested sectors and appealing for private equity and debt transactions, there is still growth of 5% in the same period of total flows in investment in pure equity.

The debt structures have ruled the inflow of fund in the real estate sector. It is the basic reason for the overleveraged real estate developers. Investors are still looking forward to witness the potential of real asset categories or retail, warehousing, and industrial alternatives which seem to be promising enough. According to the report, there was 31% of investment in private equity in Mumbai, which is highest in India. Delhi/NCR reported 27% of growth while Bangalore was at 12 percent. There were limited activities and influence of PE funding in tier-II and other
cities.