2023-05-10-莱坊-Investments_in_Real_Estate_2022_22页_1mb

India's Net Zero Ambition and Green Finance Progress

• India's five commitments under the "Panchamrit" plan aim to reduce emissions and achieve net zero by 2070, requiring significant investments in clean energy.
• Green bonds have gained popularity globally, with approximately USD 1.867 trillion raised since 2015, led by Europe and the Asia-Pacific region. India issued USD 22 billion in green bonds during 2015-H1 2022, ranking 20th globally.
• Despite green bond issuance, financing for climate-related projects remains insufficient, with India required to invest around USD 2.5 trillion (or USD 10.1 trillion) by 2030 and 2070 respectively to meet Paris Agreement goals and transition to clean energy.

Private Equity (PE) Investments in Real Estate (9M 2022)

• PE investments in real estate totaled USD 4.2 billion in India's first nine months of 2022, a 25% decrease compared to the same period in 2021, driven by inflation, rising interest rates, and geopolitical instability.
• Mumbai dominated investments across asset classes, accounting for 60% in 9M 2022, followed by Bengaluru (17%). The office sector led investments (USD 2.3 billion), followed by warehousing (USD 1.2 billion). Average deal size rose to USD 191 million.
• Residential and retail saw the highest YoY declines, while warehousing experienced an 11% increase.

Asset Class Breakdown (9M 2022)

• Office: Remained the most favored asset class with investments declining 15% YoY despite a focus on ready assets (67%) and under-construction developments (33%). Offices were widely divided among multiple cities.
• Residential: Noted USD 370 million in 9M 2022, a 63% YoY decline. Debt preference increased due to caution.
• Retail: Experiencing the sharpest YoY drop (63%) with USD 303 million invested. Global funds dominated, with investments primarily concentrated in major metro cities.
• Warehousing: The most promising asset class with an 11% YoY increase to USD 1.2 billion. Supported by e-commerce and logistics growth. Greenfield investments also saw strong interest.

Outlook for 2022

• Overall PE investments in India for 2022 were expected to decline by 19% YoY, resulting in USD 5.0 billion, due to factors like liquidity, tighter monetary policy globally (higher interest rates) and subdued sentiment stemming from geopolitical tensions and inflation fears.
• Future investment climate hinges on global economic conditions and policy measures. Key growth areas for PE investments are warehousing, logistics, and office assets.