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2/25/2019

Commercial Real Estate Market in India Becoming Hotbed for Global Investors



With relaxed FDI guidelines, stringent government policies and robust business environment, the commercial real estate in India is witnessing steady demand an increase in prices. Several developments have boosted the investment prospects in the commercial real estate market, such as the logistics sector has been granted infrastructure status, 100 percent

FDI

is permitted in e-commerce marketplace and indirect tax reforms, like the Goods and Services Tax (GST).


The commercial real estate market continues to be a strong beneficiary of economic growth in the country. The growing trend of commercial space in the market is attracting foreign investors to make investments in the commercial real estate sector. Investments in commercial real estate hit a record high last year on increased demand of global investors to own real estate in the world’s fastest growing economy. According to the senior director of Asia-Pacific analytics, Petra Blazkova, “no less than 60 percent of total Indian real estate deal was done by foreign buyers, flagging that the country is once again on the rise and is progressively ending up as a part of the worldwide institutional real estate investment."

Strong demand from technology, finance, and the e-commerce sectors has fueled the growth of commercial properties and the foreign investment in this sector witnessed an untouched high of $4.4 billion in the year of 2018. Due to the business-friendly investment climate, cross-border investors are expanding their investment portfolios in the commercial real estate market of India such as CPPIB, Blackstone, Brookfield and The Xander Group. Along with this, there are some Asian buyers such as GIC and Mapletree Investments have been actively picking up their allocation to the commercial real estate market.


Sales of commercial property in the business capital of India - Mumbai, jumped seven-fold over the most recent year to $1.45 billion. That made it to the 15th rank of India’s most active metropolitan city for commercial property investments from 53rd in the year of 2017. Even sales in Bengaluru reached at $738 million and Chennai at $667 million. This is clearly because of the increase in demand of the IT companies, co-working spaces, data centers, and financial service centers.

Considering the wide array of investment opportunities — where cross-border investors have successfully capitalized on country’s infrastructure investments — Indian commercial real estate market has undoubtedly become the preferred choice for global investment activities.

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