Investment flow into real estate drops 31 pc to USD 2.2 bn during Jan-Jun: Anarock

Investment flow into real estate fell 31 per cent to USD 2.2 billion during the first half of this year, mainly due to liquidity crisis in NBFC, according to property consultant Anarock.

The total inflow into the sector stood at USD 3.2 billion in the corresponding period of the previous year, the consultant said in a statement.

Out of the total USD 2.2 billion of inflows, commercial real estate attracted the lion's share at 64 per cent amounting to over USD 1.4 billion. Residential real estate attracted over USD 270 million, retail real estate USD 260 million and logistics & warehousing nearly USD 200 million.

The inflows from private equity (PE) players stood at over USD 2.1 billion, while a mere USD 140 million came in from non-banking finance companies (NBFCs) and housing finance companies (HFCs). Of the total USD 2.2 billion funding, over 89 per cent was equity funding and the rest in debt form.

"A majority government at the Centre is gradually reviving private equity's confidence in Indian real estate -- especially the commercial sector. Our research indicates that PE players infused USD 580 million into Indian real estate in the month of June, immediately after Modi 2.0 took charge," said Shobhit Agarwal, managing director and chief executive officer, Anarock Capital.

"That said, the general elections predictably cast a shadow on funding into Indian real estate. Also, the IL&FS default last year and the RBI's tightening norms for NBFC and HFC lending to real estate had a severe impact, to say the least," he added.