The Indian real estate marketing is heading for a steady revival in 2016, with over 70% of
investors expecting improvement in sales in the next 12 months. The report
Peering Into 2016: Taking Pulse of Investor Preference says there is a spike in
investor interest in the real estate market as around 43% of respondents saying
that the number of successful exits will increase this year.
While Mumbai and Bengaluru will
continue to be the most preferred destinations for investment, commercial
office and mid-segment residential property will be the top two preferred
assets classes by investors. After
relatively muted calendar year 2013 and 2014, private equity investors
significantly increased their bets on the Indian real estate sector in 2015.
This report examines the motivations and expectations of PE funds who are now
actively ramping up their exposure to this sector.
As per report, a majority of
exits over the last 12-18 months has been characterized by refinancing or
buyback. A significant number of investors who participated in the survey
believe that the refinancing theme is set to continue beyond the next 12 months. The report said proposed regulatory
initiatives such as the relaxation of foreign direct investment rules in real
estate and passage of real estate regulatory bill will enhance investment in
smaller projects and positively impact sentiment by boosting buyer confidence.
Today there are several financing
options available. Driven by the need to increase returns and a desire to
diversify, investor’s interest in international property markets is once again
on the rise and India definitely seems to be leading that interest. According
to the report, newer sources of capital from Japan & China are expected to
enter the Indian real estate market in 2016 while pure equity investments are
likely to make a comeback this year.
For the report, JLL carried out a
survey of seasoned investment professionals across a number of issues like
market fundamentals, successful exits, distressed deals as well as top three
asset classes and top three cities for investment over the next 12 month
period. Few of the challenges in the market have bottomed out. So definitely
the market is reviving but it is going to be a slow one. There is a going to be
greater balance between demand and supply. Investor sentiments have improved.
However, it is a cautious one where investors are now more focused on good
quality and locations.
