With growing demand for both residential and commercial space, as well as an increasing focus on logistics due to the growth of e-commerce, these funds are capitalizing on a variety of opportunities.
Since January 2021, several real estate-focused AIFs have announced plans to raise more than $8.2 billion, targeting residential, commercial and logistics assetsThese funds have already raised more than $5.3 billion, according to data from Gentleman Frank India.
The fundraising is an indication of growing confidence in the potential of the Indian real estate sector, with strong demand and growth prospects.
“Private equity investments in the real estate sector are expected to remain robust for the foreseeable future, with a significant pipeline of real estate assets and undeployed capital. An estimated $2 billion of the $5.3 billion raised for the real estate sector in recent years remains to be deployed,” said Harry Chaplin Rogers, Head of International Capital Markets, Knight Frank India.
“This untapped pool of funds represents a significant growth opportunity for the Indian real estate sector as investors look to strategically invest their capital in high-yielding assets. “The convergence of rising demand, strategic capital investment and renewed institutional inflows positions the Indian real estate market for robust, long-term growth. The synergy of domestic and foreign investments is expected to further strengthen the sector’s resilience, driving sustained expansion and innovation in the years to come,” said Jaxay Shah, CEO, Savvy Group. Investors, both domestic and foreign, have shown robust interest in the country’s real estate market, viewing it as a high-potential destination for long-term investments.
According to Rogers, the outlook for India remains favourable among global funds and with the interest rate cycle turning in Western economies, the second half of 2024 is expected to witness a strong boost in real estate investment flows into the country.
In the future, the availability of unused capital, combined with the expected return on foreign investment inflowsIt is likely to spur further growth in the sector.
With domestic private equity funds and foreign investors eyeing opportunities in India, the real estate market is poised for accelerated growth across several segments, reinforcing its importance in the broader economic landscape, experts said.
The convergence of capital from local and global sources has set the stage for a sustained momentum in the Indian real estate market, driving innovation and expansion in the coming years.
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