Institutional investments in RE inch towards pre-pandemic levels

Mumbai: Institutional investments in the Indian real estate are inching towards pre-pandemic levels. They maintained a steady momentum at $5.4 billion, rising 10 per cent YoY during 2023, says a report by Colliers India.

Settl., a leading co-living operator in India, has alone raised Rs 10 crore in funding.

In recent times, institutional investors, who have traditionally gravitated towards core asset classes, are increasingly diversifying their portfolios to include non-core assets. A notable example of this trend is their growing interest in the co-living segment, indicating a broader shift in investment strategies and risk appetite.

Both domestic and foreign investors continue to express unwavering confidence in the Indian real estate market. This confidence is underpinned by India's remarkable position as one of the fastest-growing economies on the global stage.

According to projections by the International Monetary Fund (IMF), India's GDP is anticipated to grow at a robust rate of 6.6 per cent in 2023. In an era marked by economic uncertainties and global challenges, India's resilient economic outlook further accentuates the attractiveness of alternative investments, including those in the real estate sector.

Talking to Bizz Buzz, Abhishek Tripathi, co-founder, Settl. says, “In line with this optimistic trajectory, Settl., a leading co-living operator in India, has successfully raised Rs 10 crore in funding. This investment round saw participation from prominent investors such as Gruhas and We Founder Circle, underscoring the industry's confidence in Settl.'s business model and growth potential.”

The managed living sector, currently valued at $6.6 billion, is poised for substantial growth in the coming years. Industry analysts and experts project that the sector could potentially triple in size, reaching a staggering $21 billion by the year 2030. This upward trajectory underscores the growing demand for co-living spaces and presents significant opportunities for innovative operators like Settl.,

Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, says, “The real estate landscape is currently experiencing a prominent upswing across various segments. From individual end-users buying their first homes to affluent families diversifying their portfolios with luxury housing and second homes, the market is witnessing robust activity. Simultaneously, retail investors are channeling their funds into the equity of listed real estate companies, while institutional investors are actively allocating capital to promising real estate projects.”

Despite these positive developments, it's essential to recognize the vast untapped potential that India's burgeoning population offers. With a population nearing 1.5 billion, there remains a significant scope for further growth and expansion within the real estate sector. As the economy continues to exhibit promising signs of progress and development, we anticipate a sustained uptick in investor interest and capital inflows into the Indian real estate market.

In this evolving landscape, institutional investors are increasingly focusing on partnering with reputable and well-established real estate developers. These investors prioritize collaborations with developers who not only have a proven track record but also possess robust expansion plans. Besides that, there is a discernible preference for projects strategically located in prime areas that offer attractive returns on investment. Such strategic partnerships and investments are fundamental for driving sustainable growth and fostering innovation within the real estate sector.

Aman Sarin, Director & Chief Executive Officer, Anant Raj says, “Post the challenging period induced by the pandemic, the real estate industry is experiencing a notable resurgence across both residential and commercial sectors.”

This renewed interest extends beyond individual homebuyers, attracting investors and institutional players alike. Due to strong economic performance, improved regulatory framework, and demand across all real estate segments, Institutions are preferring to invest in India, he added.

The revival can be attributed to various factors, with heightened transparency and accountability emerging as a leading contributor. These improvements have instilled a renewed sense of confidence among investors, marking a positive shift after years of caution and hesitations. Investors are particularly interested in partnering with reputable developers like Anant Raj limited with a proven track record and ongoing real estate projects strategically positioned in high-potential growth areas.

Institutional Realty

Institutional investments surge to $5.4 bn, up 10% in 2023

l Settl., a major co-living operator, secures Rs 10 crore funding

l Institutional investors are diversifying portfolios

l Confidence in India’s realty stems from its robust economic growth

l The managed living sector, valued at $6.6 billion, anticipates tripling