2024 definitely looks more positive and might see increased investor activity amidst a robust economic environment and positive play of market indicators. With global investors partnering with local developers, there is ample dry powder to be invested in the Indian real estate market (especially in office and industrial sectors) which is likely to be deployed in a phased manner in the short term. Within APAC, India is expected to remain the most preferred emerging region owing to its fast-paced growth trajectory, attractive pricing, better valuations, and higher yields. Global as well as domestic investors will continue to allocate funds in various markets and asset classes while keeping their core focus towards office assets.
- Alternative investments to rise –During 2024, most investors are likely to expand their portfolios beyond core office assets, exploring alternate asset classes such as data centers, life sciences, holiday homes, co-living, etc.
- Industrial & warehousing sector to see uptick in investments –India’s manufacturing sector is growing at an impressive pace owing to robust demand and increased industrial output. Manufacturing, industrial & warehousing sectors are pivotal components in India’s journey towards a USD 5 trillion economy. Demography driven consumption pattern and rising warehousing demand from 3PL & E-commerce will result in attractive investment scenario for the industrial & warehousing sector in the short to mid-term.
- Creation of more platforms and joint ventures –Amidst limited availability of ready office assets, investors will continue to create platforms and JVs with developers for developing high quality Grade A office assets across multiple locations. A robust Grade A under construction supply pipeline of over 150 mn sq ft in the next 3 years will provide multiple opportunities for investment in greenfield assets.
- Different deal structures to co-exist– Performance credit, special situations, portfolio acquisitions, asset reconstruction and other innovative structures have been growing and are likely to attract more investments. Moreover, amendments in alternate investment funds (AIFs), green financing, and REITs are likely to futrther simplify investments from foreign as well domestic investors.
- Green financing and sustainability reporting to gain increasing prominence– As sustainability increasingly becomes a key driver in investment decisions, green-financing is likely to gain prominence in India, provided there is a concerted effort by all stakeholders. With ESG reporting becoming gradually mandatory in India, investors will remain in constant pursuit for portfolios with well-defined sustainability goals and net-zero targets. – Badal Yagnik
