Canadian institutional investors, along with various partners, have invested nearly $9 billion in Indian real estate, and this diplomatic dispute is unlikely to have a negative impact on existing investments, says senior vice president of investment advisory at ANAROCK Capital. , said Aashish Agarwal. .
According to ANAROCK Capital, Canadian institutional investors have invested nearly $9 billion in Indian real estate with various partners. (Representative photo) (Shutterstock)
“While the current political situation between India and Canada is alarming, we believe it is essential to focus on the long-term fundamentals that drive investment decisions. “It remains fundamentally strong, supported by growth, urbanization and increased demand for residential and commercial space,” he told HT.com.
“We do not expect existing investments to be adversely affected by recent events. Investors recognize the potential of India as a major market and the long-term benefits of investing in this dynamic economy. “Given the benefits, we are likely to continue to be actively involved,” he added.
Despite rising diplomatic tensions between India and Canada, Canadian pension funds have so far remained focused on investing in India, according to media reports. Key sectors attracting Canadian pension funds include infrastructure, renewable energy, technology and financial services.
According to the National Investment Promotion and Facilitation Authority (Investment India), Canada ranks 18th among foreign investors in India, with a cumulative investment of 3.31 billion yen from 2020-21 to 2022-23. It is worth 1 million dollars. Investments from Canada account for 0.5% of India’s total foreign direct investment (FDI), with services and infrastructure accounting for 41% of inflows.
According to a report titled “Canada Pension Fund Investments in Asia-Pacific.” From 2013 to 2023, approximately 57% of Canada’s investments in India were concentrated in real estate, financial services, and industrial transportation. Infrastructure and renewable energy sectors are emerging.
Also read: Canadian pension fund sticks with India amid conflict
Overall private equity investment in the real estate sector
Overall private equity investment in the Indian real estate sector fell by 4% to $2.3 billion in the first half of this fiscal year due to lower inflows into office assets, according to a report by Anarock. The company pointed out that the total number of transactions from April to September this year decreased to 17 from 24 in the same period last year.
During this period, industrial and logistics assets attracted 67% of total investment, significantly outpacing the office and residential sectors (which each attracted 17%).
While private equity investment in the office sector fell by 79%, the industrial and logistics sector saw a significant increase in investment volume of 378% compared to the same period last financial year.
Also read: Equity investment in real estate sector increases by 46% to reach $8.9 billion from January to September 2024
Total equity investment in the real estate sector from January to September 2024 reached $8.9 billion, an increase of 46% year-on-year. According to CBRE’s report titled ‘India Market Monitor Q3 2024 – Investments’, Mumbai, Bengaluru and Chennai accounted for 66% of investments in July-September 2024 period.
Mumbai, along with Bangalore and Chennai, led the equity investment activity from July to September 2024. Together, these three cities accounted for more than 66% of total investment during the period, the report said. From July to September 2024, land/developmental land accounted for the majority of investments with a share of 45%, followed by the office sector with a share of 24%. According to the report, the retail sector saw a resurgence in capital inflows, gaining a share of around 22% in the quarter.
