Foreign investors’ interest in Indian real estate is on the rise one again almost after five years as indicated by India-specific cumulative fund raising.
India-specific cumulative fund raising attained its peak in the pre-global financial crisis (GFC) period. During this period between 2005 and 2008, there were 50 such funds that raised $16 billion in total. However, post-global financial crisis, only 29 funds got raised in five years, with cumulative fundraising of $3.9 billion, said a JLL India report.
“During the pre-GFC phase, 82% of funds got raised in US Dollar. This reduced to 57% in post-GFC phase when micro-market understanding was required more than banking on the macro-economy. Interestingly, the contribution, 2014-onwards, has increased considerably to 70% – hinting that the positivity is here to stay for some time,” Shobit Agarwal, MD – Capital Markets, JLL India.
The cycle started gaining momentum again just before the 2014 general elections. $2.2 billion has been raised so far in the current investment cycle. This shows a definite rise in confidence for Indian real estate.
Not only has the volume of investment increased but there has also been an increase in the average ticket size from $134 million to $184 million. If investment done in US Dollar alone is considered, the average ticket size has gone up from $159 billion in 2009-13 to $388 billion in the ongoing phase that started in 2014.