He said global institutional investors maintain a strong interest in Indian office assets due to factors such as an expanding talent pool, increased digitisation and transparency and stable returns.
“From a global investor’s perspective, the Indian property market is currently presenting alluring pricing, valuations, and yields, with Bengaluru and Mumbai ranking 2nd and 3rd in the APAC cap rates Q4 2022 report,” said Kenny.
“Key institutional investors are forming strategic partnerships to expand their office portfolios in India, given the sector’s strong growth prospects,” he said.
Kenny said rapid repricing in markets across the APAC region is resulting in improved valuations, which is anticipated to attract more investments in the first half of 2023.
“Gateway markets with safe-haven status and deep levels of private capital are likely to thrive in this environment. Businesses are realigning plans, and investors are sharpening strategies to pick the right markets and assets for strong returns this year,” he told ET.
Global funds like Blackstone, Brookfield, and CPPIB have expressed interest in acquiring marquee assets in the Indian office segment, while other asset classes like residential, industrial warehousing, and data centres have also held promise for investors.
“Investors are primarily focusing on greenfield and ready office assets with large portfolios with the intention of bundling them up as REITs in the future, and the majority of the deals for office assets were entity-led, as investors snap up investment-grade office portfolios,” he said.
The Indian real estate market received strong institutional investments of $1.7 billion in Q1 2023, with the office sector leading the way and providing a positive outlook for the year ahead with investment inflows in the office sector rising 41% YoY to $0.9 billion, led by select large deals.
