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Indian real estate sector received an equity investment of USD 6,221 million in 2019: Report

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According to Wealth Report 2020, Indian real estate sector received an equity investment of USD 6,221 million in 2019 with the office segment receiving a sizeable 47% of the total equity investment.

Globally, private capital was responsible for $333bn of commercial real estate purchases in 2019, a 5% rise on the previous year.

The report also studies the attitude and preferences of ultra-wealthy for making property investments in 2020. Properties made 20% of the asset class for Indian ultra-high net-worth individuals (UHNWIs)

Equity investments in Indian real estate (in USD Million)

YearEquity investment (USD Million)
20152,782
20163,474
20176,891
20187,215
20196,221

Source: Knight Frank Wealth Report

Residential

  • Property remains an attractive asset class for ultra-wealthy Indians, 24% are planning to buy a new home in 2020                                                                                                                                                 
  • Preferred destinations outside India – 1) UK   2) US 3) Australia 4) Singapore 5) United Arab Emirates
  • 64% cited availability and quality of local “wellness” facilities as a selectioncriterion for purchasing a home   
When choosing a new home please select which of the attributes listed below are becoming increasingly important
% respondents who selected each option
 How the design of a property contributes to their physical and mental wellbeingThe “wellness” amenities offered by a developmentThe quality of nearby medical facilitiesThe availability and quality of local “wellness” facilities – gyms; sports clubs; spas; healthy-eating optionsAir quality around the propertyAccess to nearby green spaces for recreation and leisureEnergy efficiency and environmental friendliness of the building
India55%55%36%64%60%60%24%
Global 50%34%43%48%42%46%36%

Source: The Attitudes Survey, Knight Frank Wealth Report 2020

Commercial 

  • While 26% of India’s ultra-wealthy are looking to invest in commercial property within India; a further 15% are allocating capital for purchase outside the country of residence in the coming year
  • Preferred destinations outside India- 1) UK   2) US 3) UAE 4) Singapore 5) Australia

Neil Brookes, Head of Capital Markets, Asia Pacific,Knight Franksaid,“Despite uncertainty in 2020 around the impact of COVID-19, interest for assets remains high with significant capital chasing limited stock. While some private investors may delay their decisions due to the current climate, we expect secure assets that offer quality income streams to be in increasing demand.”

Sectors of Interest

Asia Pacific Capital Sources and Preferred Asset Classes

Source1st2nd3rd
AustraliaInfrastructureOfficesHealthcare / Industrial
ChinaRetirementEducationHealthcare
Hong KongHotels and LeisureHealthcareLogistics
IndiaOfficesHealthcareEducation
JapanHotels and LeisureOfficesEducation
MalaysiaHealthcareEducationRetail
New ZealandOfficesRetirement/HealthcareRetail / Logistics / Infrastructure
PhilippinesLogisticsOfficesDevelopment land
SingaporeHotels and LeisureOfficesRetirement
South KoreaRetirementResidential private rented sectorOffices
TaiwanOfficesRetirement/HealthcareResidential private rented sector
ThailandRetirementInfrastructureHotels and Leisure
AverageOfficesRetirementHealthcare

Source: The Attitudes Survey, Knight Frank Wealth Report 2020

 Increasingly interested in real estate sectors that could profit from the “wellness” trendIncreasingly concerned about the impact of the buildings they invest in on the “wellness” of their occupantsIncreasingly concerned about the impact of the buildings they invest in on the wider environment
India52%30%37%
Global 54%25%45%

Source: The Attitudes Survey, Knight Frank Wealth Report 2020

Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “Indian Ultra- High- Net-Worth Individuals are making changes to their investment preferences, be it impacting their lifestyle or their future wealth. Through the Knight Frank AttitudesSurvey, we see the new aspect of ‘wellness’as a prominent criterion for investing in real estate assets. To protect and grow their investments,  office sector remains preferred asset class for private capital investors in India, along with healthcare, and education in second and third place, as investors continue pivot to alternative asset classes in the hunt for yield, return and diversification.” 

ALSO READ: Hyderabad only Indian city in Top 20 globally in-home price appreciation: Knight Frank

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