New Delhi: Nearly 6,800 acres have been acquired by real estate developers and investors for more than USD 12.2 billion during 2018-22 period to construct greenfield realty projects, according to property consultant CBRE India.
The consultant released a report ‘Indian Real Estate – Betting on a Capital Future’ on Tuesday.
“The land acquisition space has been buzzing with higher interest primarily from developers in the recent past. On a cumulative basis, nearly 6,800 acres of land have been acquired by developers and investors during 2018-22,” the report said.
The activity has especially accelerated in the past two years, with nearly 60 percent of the land being acquired from January 2021 onwards.
“The fact that 2022 was a landmark year in terms of land activity is indicative of the long-term bets that investors are willing to take on the real estate sector in India,” said Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE.
The report mentioned that over USD 12 billion worth of capital deployed to drive the next phase of greenfield development.
Residential and mixed-use land parcels accounted for nearly 60 per cent of the total investments and these two sectors together attracted over USD 7 billion worth of capital flows, which is expected to lead to strong supply in the coming years, the consultant said.
Land acquisition activity for greenfield office developments accounted for roughly 19 per cent of the total investments in sites since 2018, followed by industrial & logistics parks 9 per cent, data centres 7 per cent and retail 3 per cent.
Geographically, CBRE said that 67 land deals took place in Delhi-NCR during 2018-22 period, comprising of 760 acres and USD 3.8 billion investment.
In Mumbai, the consultant said that 73 land deals were transacted involving 960 acres and an investment of USD 3.8 billion.
As many as 44 land deals happened in Bengaluru, comprising of 700 acres and USD 1.1 billion value.
Hyderabad saw 24 land deals for 970 acres with USD 0.9 billion investment, while Chennai witnessed 47 land deals involving 500 acres and USD 0.9 billion inflow.
As many as 27 land deals were transacted in Pune, comprising of 450 acres and USD 0.6 billion investment. In Kolkata, only 4 deals happened for 110 acres and USD 0.1 billion investment.
Land acquired in other cities across India that spans nearly 1,300 acres.
According to the report, the overall investments in the real estate sector between the period 2018-2022 stood at USD 43.3 billion. “Equity investments over this period stood at USD 31.8 billion while debt investments were USD 11.5 billion.” Foreign investors based primarily in North America and Singapore deployed over USD 18 billion of equity, garnering about 58 per cent of the total equity investments in real estate in India. North America and Singapore-based investors have remained the largest foreign contributors in equity investments since 2018, with shares of nearly 41 per cent and 8 per cent, respectively.
“Over the next two years, we expect investment flows to remain steady with cumulative inflows of USD 16-17 billion,” Magazine said.
“Taking into account historical and current trends and the capital that existing investment platforms have raised over the past 2-3 years, we anticipate that the office sector will continue to attract the largest share of institutional inflows, followed by I&L and sites/land parcels,” he said.
Moreover, Magazine believed that alternative investments, specifically in data centres, could gain further traction.