Indian Real Estate - Betting On A Capital Future - April 2023 - Final

I N T ELLIG ENT INVESTMENT
Indian Real Estate:

Betting on a 'Capital' Future
REPORT
CBRE RESEARCH APRIL 2023

1 India: A land of promising
opportunities
5 Fund-raising
through Primary
Capital Markets
2 Equity Investment
Landscape in Indian
6 Trends in the
Debt Financing
Contents 3
Real Estate
Investing into the

Future through Land
7
Space
Key Emerging
Trends
Acquisitions
4 Investment and
Development Platforms
Gaining Traction 8 The Way
Forward
Indian Real Estate: Betting on a 'Capital' Future
S E C T I O N 1
India: A land of promising opportunities
3 CBRE RESEARCH ©2023 CBRE, INC.

India: A land of promising opportunities Indian Real Estate: Betting on a 'Capital' Future
1.1
India’s strong underlying economic
and demographic fundamentals…
Strong economic fundamentals
India was the world’s India’s influence as a The gross non-perform- Within APAC,
fastest growing major major world power has ing assets (GNPA) ratio corporates remain most
economy with GDP been growing, with the of India’s Scheduled excited about
growth of 9.1 % in country assuming G20 Commercial Banks (SCBs) expanding their
FY2021-221. During presidency from touched a seven-year low footprint in India, as
FY23-25E, the Indian December 20224. of 5% in September 2022, revealed in our March
economy is slated to creating opportunity for a Leasing Sentiment
grow at CAGR of 6.5%, Expanding regional strong growth in the Survey.
significantly outpacing FTAs with several key lending cycle6.
the world average large economies (UK,
(2.4%), including that of EU, Canada, GCC, Growing formalization of
China (>4.5%)2. Eurasian Economic the Indian capital (stock)
Union) in addition to markets could result in
India replaced UK as the existing FTAs could higher institutional
the world’s fifth boost commerce and investments3.
largest economy in trade5.
2022; likely to become As per the estimates, the
third largest economy market capitalization of
by 2027 surpassing Indian stock market is
Japan and Germany3. likely to triple by 2031 to
touch USD 10 trillion from
about USD 3.5 trillion in
2022.
Source:
1. MOSPI, CBRE India Research, Q1 2023 5. Press Information Bureau, World Economic Forum, Business Standard: CBRE India Research, Q1 2023
2: World Bank, IMF and OECD; CBRE India Research, Q1 2023 6. Reserve Bank of India; CBRE India Research, Q1 2023
3: India’s Impending Economic Boom, Morgan Stanley Research; CBRE India Research, Q1 2023
4: Press Information Bureau; CBRE India Research, Q1 2023

1.1
India’s strong underlying economic
and demographic fundamentals…
Favourable demographics
With a population India had one of the Boasts of the 2nd Talent availability at a
base of nearly 1.42 largest urban largest base of STEM competitive cost* of
billion people as of population in the world (science, technology, about ~USD 10,000 /
January 2023, India (493 million) as of CY21. engineering and manu- year, one of the lowest
has outpaced China to Urban GDP contribution facturing) talent pool in the world13.
become the most is expected to grow (2.14 million annually)
populous country in from 63.0% in FY20 to globally (next only to
the world, with a 75.0% by FY30E8. China)11.
share of ~18% in the
total population7. India is likely to add Home to the largest
140 million middle-in- base of digitally-skilled
With over 383 million come households and talent pool (1.6 million)
people in the age 21 million HNIs by globally11.
group of 15-29 years 20309.
as of December 2021, Base of 2nd largest
India boasts of the Overall consumption English-speaking
largest youth to grow over 2.5x to population (>125
population globally8. reach USD 4.9 trillion million), next only to The
by 2031 from USD 2 US12.
trillion in 202210.
Source:
7. World Population Review; CBRE India Research, Q1 2023 12. Maps of World; CBRE India Research, Q1 2023
8. World Bank; Technopak Advisors; CBRE India Research, Q1 2023 13. CBRE India Research, Q1 2023
9. World Economic Forum; CBRE India Research, Q1 2023 Note: * Business Analyst labour cost = Salary + Employer Tax (USD / year);
10. World Economic Forum; Morgan Stanley Research; CBRE India Research, Q1 2023 Source: CBRE’s Global Location Strategies post Covid-19, July 2020.
11. NASSCOM; CBRE India Research, Q1 2023

1.1
...coupled with the evolving global
trade landscape builds a strong case for
higher investments in real estate
Evolving global trade and investment landscape
China+1 and Europe+1 The One District One The Indian technology Global real estate dry
strategies are being Product – Districts as industry is expected to powder across
adopted by many global Exports Hubs grow at a CAGR of 13% strategies attained a
MNCs to de-risk supply (ODOP-DEH) initiative to USD 350 billion by new peak of USD 435
chain requirements and and PLI schemes FY2025 from USD 191 billion in December
mitigate production announced by Indian billion in FY202018. 202220.
challenges which could government could
benefit India (along with boost investments India has consistently Dry powder targeting
Vietnam) across various across various topped Kearney's APAC real estate
sectors14. industries16. Global Services markets scaled an
Location Index since all-time high of USD
India could capture Open Network for 2004, which maps the 66 Bn as of December
increased market share Digital Commerce attractiveness of 2022, waiting to be
of USD 600 billion to (ONDC) to enable small countries for IT deployed20.
USD 1.2 trillion in the businesses gain access offshoring19.
global supply chain by to new markets and
203014. suppliers. As a result,
GDP contribution from
Logistics cost as a SMEs could increase
percentage of GDP in to 50% by 2030 from
India to be brought down 30% presently17.
to 8-10% by 2030 from
14%15.
Source:
14: Financial Express, India’s Century – FICCI and McKinsey, CBRE India Research, Q1 2023 19. NASSCOM, Kearney; CBRE India Research, Q1 2023
15. Press Information Bureau; National Logistics Policy, 2022; CBRE India Research, Q1 2023 20. CBRE Global Research, Q1 2023
18. Financial Express; CBRE India Research, Q1 2023

1.1
...coupled with the evolving global
trade landscape builds a strong case
for higher investments in real estate
Indian real estate21 on a strong footing
The market size* of core real estate Cap rates** in India Deepening internet The balance sheets
sectors is likely to grow at a CAGR (7.5%-8.5%) are penetration, of developers
of 7-8% during 2023-25, which is attractive than most e-commerce (primarily tier-I
higher than India’s GDP. prominent econo- expansion, growing players) are in a
mies (2.5-7.0% in the infrastructure much stronger
Office space stock surged by 2x UK, Hong Kong, investments, and position, thereby
over the past decade to cross 820+ Japan, US, China, supply chain aiding the next
million sq. ft. in 2022; to reach ~1 Bn Singapore and modernization, could phase of real estate
sq. ft. by 2025. Germany). continue to boost development.
consumption across
Industrial and logistics (I&L) stock The National tier-I,II and III cities.
has risen by ~2x since 2012 Monetization
to touch 320+ million sq. ft. in 2022; Pipeline*** would Digitization push
to reach ~410 million sq. ft. by help unlock non-core and the data
2025. land assets and localization policy
further bolster could drive
Shopping centre stock grew by investment inflows in exponential growth
over 2x since 2012 to cross 75 the real estate in the data centers
million sq. ft. in 2022; to touch ~95 sector. space.
million sq. ft. by 2025.
Residential housing stock saw

over 2x growth in the past 10 years
and crossed 3.2 million units; to
reach ~4 million units by 2025.
Source: 21: CBRE India Research, Q1 2023
*All opinions and estimates included in this report constitute our judgment as of the date of release. There may be differences between projected and actual results because events and circumstances frequently do not occur as predicted.
CBRE specifically excludes any responsibility or liability whatsoever in connection with any purchases, disputes, developments or loss of profits arising on account of this report.
** Cap rates for stabilized assets in core / centralized locations are considered.
*** The central government in August 2021 unveiled the NMP which involves an asset monetisation pipeline of projects worth INR 6 trillion (USD 73 bn) between FY2022 – 25. This includes assets spread across 20 asset classes and more
than 12-line ministries. Within this, nearly INR 44,000 crore (USD 5.3 bn) worth of assets would be monetized in urban real estate and warehousing categories.

S E C T I O N 2
Equity investment landscape in

Indian real estate

Equity investment landscape in Indian real estate Indian Real Estate: Betting on a 'Capital' Future
2.1
Investments scaled a new peak in
2022; real estate remains an attractive
proposition in India Figure 2.1.1: Investments attained a new peak in 2022 Figure 2.1.2: Mid-sized deals dominated investments
Buoyed by the robust recovery of the Indian real estate sector, equity
investments* in the sector grew by nearly 33% Y-o-Y in 2022 to USD 7.8
140
billion. These are the highest annual investment inflows recorded in India 9 0.12
until date, exceeding the pre-pandemic (2019) levels by over 22%.

8 120
0.10
The strong momentum seen in deal closures continued in 2022, with about 7
125 deals reported, as compared with 123 in 2021. The average deal size 100
has also inched up to nearly USD 62 million in 2022 from about USD 48 6 0.08
million recorded in 2021, registering a strong growth of about 30% Y-o-Y. 80
5
Mid-sized deals (ranging between USD 10-50 million) accounted for a
No. of deals
0.06
USD Billion
USD Billion
major chunk (57%) of the total investment inflows recorded in 2022. 4 60
On a cumulative basis, the real estate sector has seen nearly USD 32 billion 3 0.04
worth of equity capital flows since 2018, with average inflows of over USD 40
2
6.0 billion per year.
0.02
20
1
Despite multiple waves of COVID-19 and consequent disruptions; the sector
exhibited strong performance in terms of attracting both domestic as 0 0 0
well as offshore capital. 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Deal value (LHS) Average deal size (RHS) <USD 10 mn USD 10-25 mn USD 25-50 mn
USD 50-100 mn >USD 100 mn
Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023 Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023
*Equity investments include those by private equity funds, pension funds, sovereign wealth funds. institutional inves-
tors, real estate developers, real estate fund-cum-developers, investment banks, corporate groups, and REITs, etc.

2.2
Gateway cities vs
emerging markets? Figure 2.2.1: Mumbai and NCR lead in cumulative inflows* (2018-2022) Figure 2.2.2 Investment trends across cities
Tier-I cities remained the major recipients of

investment flows 9
Delhi-NCR followed by Mumbai and Bangalore dominated investments in

8
2022, accounting for a share of over 67% in total investments. In terms of
Y-o-Y growth as well, Delhi-NCR reported a strong increase of 83%, followed 7
by Bangalore (76%) and Mumbai (27%).
25% 21% 16%

6
A slightly reverse trend was prevalent during 2018-22 period, wherein
Mumbai followed by Delhi-NCR and Bangalore dominated cumulative 5
investments. The three gateway cities have accounted for over 63% of Mumbai Delhi-NCR Bangalore 4
USD Billion
the cumulative investments since 2018. This translates into about USD 20
billion worth of equity capital deployed across these cities. 3
With regards to the number of deal closures as well, the activity was primarily 2
concentrated in these cities. Over 300 deals have been recorded in these
cities since 2018 – which translates into over 57% of the total deal activity. 1
The key driving factor behind this dominance is the heavy concentration
0
of completed or under-construction investment-grade projects in
9% 7% 5%
2018 2019 2020 2021 2022
these cities. A strong and continuously improving urban infrastructure,
Delhi - NCR Mumbai Bangalore Chennai
availability of a large base of diversified talent pool, quality tenant
Hyderabad Pune Kolkata Others*
covenants, and an overall market formalization are some of the additional Chennai Hyderabad Pune
elements that are driving investment flows towards these markets.
Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023 Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023
However, our data also highlights that while investments in the office sector *Others include investments in cities other than the top seven cities. It also includes investments that are
*17% share is in Others category.
continue to be predominantly concentrated in metros / tier-I cities, capital spread across multiple cities, but the individual share of each city has not been disclosed either by the
buyer or the seller.
inflows in retail, I&L and site / land parcels have moved beyond these cities
to tier-II and III locations in the recent past.

2.3
Office sector remains the most
preferred investment bet Figure 2.3.1: Sectoral analysis of capital inflows
A five-year (2018-22) data analysis revealed that the office sector remained
the mainstay of investors, particularly foreign institutional investors. This
9 sector has attracted investments worth nearly USD 13 billion, accounting
for over 40% of the total inflows. Despite COVID-19-induced domestic and
8
global headwinds, core assets (office) exhibited resilience throughout in
7 attracting interest from institutional investors.
6
This was closely followed by acquisition of sites / land parcels, which saw
USD Billion
5 deployment of over USD 12 billion, translating into a share of about 38% in
cumulative investments.
4
3
2 Figure 2.3.2 Cumulative share of investments across sectors (2018-2022)
40% 38%
1
0
2018 2019 2020 2021 2022
Office Site Retail I&L Office Site

Hotel Residential Mixed use Others
Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023
Retail
7% I&L
5%
Site and office sector led capital flows
in 2022
Together, site / land parcels (48%) and the office sector (35%)
accounted for nearly 83% of the investment flows in 2022. The retail Residential
4% Hotel
3%
sector’s share in investments shot up to nearly 13% from almost
negligible in the previous year. This was led by a strong comeback
by organized offline retail that has seen sales growth of 19% during
the April – December 2022 period in comparison to the pre-pandemic Mixed-use
1% Others
2%
period22. It is interesting to note that 75% of the sales were price-led
unlike the historic trend wherein volume drove the sales.
11 CBRE RESEARCH 22. Retailers Association of India, December 2022; CBRE India Research, Q1 2023 ©2023 CBRE, INC.
2.4
Institutional investors leading
the inflows in Indian RE
Figure 2.4.1: Capital flows by investor category
9
8
7
6
USD Billion
5
4
3
2
1
0
2018 2019 2020 2021 2022
Institutional Property compay Corporation REIT Others
Institutional investors have consistently been a major source of capital

deployment in Indian real estate. They accounted for over 42% of investments in
2022, followed by property companies (over 32%).
A similar trend prevailed during 2018-22 as well, wherein the former accounted
for nearly half of the institutional inflows (USD 15.7 billion) whereas the latter
accounted for a one-third share (USD 10.4 billion). We expect that institutional
investors would continue to be a prime source for capital-raising activity, primarily
as funding from banks and NBFCs remains limited (or negligible) through the equity
route.
An interesting trend that has emerged in the recent past is that due to the limited
availability of investible assets in core markets / tier-I cities for acquisition, the
focus on opportunistic bets is gaining momentum. Institutional Investors are now
more open to participating in build-to-core assets either through joint ventures or
joint development platforms; in fact, a few investors are even going solo, reflecting
their confidence and conviction in the growth potential of India.

2.5
North-American investors remain
the major source of capital Figure 2.5.2: Capital inflows in India from key countries (2018-2022)
Foreign investors collectively pumped in nearly USD 4.4 billion in 2022,

accounting for about 57% of the inflows. Their domestic counterparts deployed
nearly USD 3.4 billion.
On a cumulative basis (2018-2022), foreign investors have deployed in excess of

USD 18 billion, accounting for a share of about 58% in total investments. North
America and Singapore-based investors have been the key drivers of foreign
investment flows since 2018. On the other hand, domestic investors (primarily RE
developers) have cumulatively pumped in over USD 13 billion, accounting for 42% Canada UK
of the total investments. USD 6.1 bn USD 0.7 bn
Germany
Cross-region* dominated investments over the past five years, accounting for USD 0.2 bn
a nearly 47% share. This was followed by investments originating domestically Japan
USA
(42%). Intra-region** accounted for the remaining share of investment flows. USD 6.9 bn Hong Kong + China USD 0.5 bn
USD 0.4 bn
Figure 2.5.1: Capital inflows by country of origin Abu Dhabi India
USD 0.8 bn USD 13.4 bn
Singapore
9
8
USD 2.5 bn
7
6
USD Billion
5
4
3
2
1
0
2018 2019 2020 2021 2022
Domestic USA Canada Singapore UK UAE Others

*Cross region – Countries outside the APAC region
**Intra-region – Countries within the APAC region Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

2.6.1 USD
The (RE)al deal makers – Institutional investors
Figure 2.6.1: Top 10 institutional investors* by capital deployment in Indian RE (2018-2022)
Institutional investors**
have deployed nearly
17.4
billion of capital
since 2018
North America-based investors have remained the largest contributors in total
INVESTOR
North America
headquartered
alternative investment
1 2 INVESTOR
North America based
alternative investment
management company
institutional investments since 2018. On a cumulative basis, the top three investors
in India have pumped in nearly USD 10.4 billion, accounting for a staggering 60%
of the total institutional investments during this period. In terms of the overall
investment flows across all investor categories, the top 10 institutional investors
and asset management with presence across real
company with strong estate and infrastructure alone have cumulatively pumped in nearly USD 15 billion, accounting for a share
presence across Indian sectors in India of about 46%
RE sector
In terms of sectoral bets, institutional investors have primarily infused capital to
INVESTOR
Prominent sovereign
wealth fund
headquartered in
3 ~USD
4 INVESTOR
Singapore headquartered
investment management
and RE development
acquire the built-up office assets, which have garnered a share of over 56% (~USD
9.8 billion) in their total investments. A strong rebound was seen in office leasing
in 2022, led by pent-up demand – this also resulted in strong investment inflows
15
North America group into the sector.
5
Investment in greenfield developments through acquisition of sites / land parcels
INVESTOR
totaled over USD 2.5 billion, accounting for a nearly 15% share. Retail witnessed
APAC based billion
6
sovereign wealth capital deployment of nearly USD 2.0 billion, which is more than 11% of the total
INVESTOR inflows. In fact, the retail sector attracted the highest institutional investment
fund
Middle-east based inflows in 2022 after office within core sectors, aided by the closure of two large
sovereign wealth fund
deals of over USD 100 million.
INVESTOR
UK headquartered
investment
management and PE
7 8 INVESTOR
Singapore headquartered
real estate development
Figure 2.6.2: Preferred sectoral bets by institutional investors
firm and investment company

2018-2022
INVESTOR
Hong Kong based
investment and real
estate
9 10 INVESTOR
North America based
0% 10% 20% 30% 40% 50%
Share %
60% 70% 80% 90% 100%
development alternative investment

management Office Site Retail I&L
company Hotel Residential Others
company
**Includes capital deployed primarily by PE funds, pension funds, sovereign wealth funds, investment
*The size of color in $ depicts the percentage share of the corresponding top 10 investors. banks, insurance companies, and REITs, etc.
The investments captured here are those available in the public domain. It only includes deployed capital during 2018-22 and does not include committed capital.

2.6.2
Over a dozen new foreign investors are
betting on Indian real estate; more are Figure 2.6.2 : Key players that have entered the Indian RE sector since 2018
expected to follow suit
Over the past five years, over a dozen foreign institutional investors, asset
managers and developers have forayed* into the Indian real estate sector. While
the investors who entered India early on in this period have been focusing on office,
I&L and residential sectors, the relatively new investors along with the traditional
sectors, are also evaluating alternate sectors such as data centers over the past 12-
18 months. Of these, a majority of the investors were based in the APAC region in
countries such as Japan, South Korea, Singapore and Australia. Also, key investors
who were previously not heavily invested in the RE space in India have started
to view the sector favorably and have upped their bets through acquisitions and
partnerships.
2018 2019 2020 2021 2022
— GLP — LOGOS — Marubeni — Cerberus — Credberg

Corporation Capital Investment
— ESR — Varde Partners
Management Management
— Mitsui Fudoson
— Mitsubishi — Meritz
— Digital Realty — Certus Capital
— Oxford
— Country Garden — InvestCorp
Properties — Yondr — Panattoni
— Sumitomo Corp — MQDC
— SSG Capital — Equinix
— Oaktree Capital Management
— Ontario Teachers’
Management
Pension Plan
— Bentall Green Oak Board (OTPP)
*In figure 2.6.2, we have attempted to highlight only those investors who have entered the Indian RE space since 2018
onwards. There are other investors who forayed into India before 2018, but have recently raised their bets. These
include Blackstone, Brookfield, GIC, ADIA, CPPIB, Xander, Prologis, CDPQ, Farallon Capital, Apollo Global, PAG, among
others. Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

2.7
The (RE)al deal makers – Developers
Figure 2.7.1: Top 10 developers* by capital inflows in Indian RE (2018-2022)
Cumulative capital flows
USD
10.4bn
from developers since 2018
have crossed nearly
DEVELOPER
Real estate
development arm of a
leading North India
1 2 DEVELOPER
Mumbai headquartered
major listed real estate
developer with strong
Real estate developers pumped in nearly USD 10.4 billion during 2018-2022,
accounting for nearly one-third of the total investments across all investor
based diversified pan-India presence in the
conglomerate residential sector
categories. The share of the top 10 developers alone stood at over 17%, with the
deployment of nearly USD 5.5 billion worth of capital for acquisition of assets. Tier-I
DEVELOPER
South India based major
real estate developer
with strong presence in
3 4 DEVELOPER
North India based
major regional player
with strong presence in
developers with a diversified presence across different states in India have primarily
been at the forefront and hence have driven overall investments.
In terms of sectoral bets, developers have primarily infused capital to acquire

the commercial office the residential and
space segment
~USD commercial sector sites / land parcels for greenfield developments. Their cumulative investments
5.5
in sites stood at nearly USD 7.4 billion, accounting for 71% of the total investments
DEVELOPER
A major listed
developer based in
South India, with
5 billion
6 DEVELOPER
North India headquartered
major listed player with a
pan-India presence across
across sectors. Riding the tide that the residential sector has been experiencing
post the pandemic, a major chunk of these inflows are intended to drive future
growth through the development of residential assets.
presence across rent rent yielding assets and
yielding assets and residential sector The office sector has been the second-most preferred sector by developers;
residential sector
witnessing an infusion of over USD 2 billion, which translates into an over 19% share
DEVELOPER
Listed real estate arm
of a Mumbai based
diversified financial
7 8 DEVELOPER
A JV platform created
b/w Mumbai based
diversified conglomerate
in total investments.
Figure 2.7.2 Preferred sectoral bets by RE developers (2018-2022)
services group and an EMEA based

large institutional
investor
2018-2022
DEVELOPER
A Mumbai based listed
developer with
presence across
9 10 DEVELOPER
A boutique branded real
estate developer with
presence in the luxury
0% 10% 20% 30% 40% 50%
Share %
60% 70% 80% 90% 100%
commercial and residential real estate

residential real estate Site Office Residential Retail
Mixed use I&L Others
*The size of color in $ depicts the percentage share of the corresponding top 10 developers.
The investments captured here are those available in the public domain. It only includes deployed capital during 2018-22 and does not include committed capital. Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

2.8
Institutional investors prefer core and
core-plus strategy; developers more
inclined towards opportunistic bets Figure 2.8.1: Capital deployment across investment strategies Table 2.8.2: Preferred sectoral bets
Capital deployment through the opportunistic route dominated overall
investments in 2022, accounting for a share of more than 60% A similar trend 7 Strategy Preferred sectors
has prevailed over the long term as well, with cumulative investments through
the opportunistic route since 2018 crossing over USD 16 billion (>50% share). 6
This was followed by the core plus strategy, through which approximately
Core
USD 7.6 billion was deployed, translating into a 24% share.
5 Office Retail
A deeper analysis of the data shows that institutional investors continue to
prefer core and core plus investment strategies, with nearly two-third (USD 4
11.5 billion) of their total capital deployment since 2018 being done through
USD billion
Core-plus
these routes. Of late, their bets through the opportunistic route have grown, 3
with roughly USD 4.8 billion being pumped through this route, translating into Office Retail I&L
a 28% share in total investments. Across all strategies, the office sector has
2
seen the highest share of institutional investments.
Meanwhile, developers have predominantly been pumping money through 1 Value-add

the opportunistic route. On a cumulative basis, they have deployed nearly USD Office Retail
7.8 billion since 2018 through this strategy, which translates into roughly 75% 0
of their total funds committed. We feel that this would usher in the next phase 2018 2019 2020 2021 2022
of the country's real estate development cycle. A large proportion (USD 3.4
Opportunistic
billion or 43%) of these opportunistic bets have been made in the residential Core Core-plus Value-add Opportunistic
segment, which has seen buoyant sales momentum over the past two years. Residential Office Mixed-use I&L Data Centres
This was followed by nearly one-third capital deployment (USD 2.6 billion) in
mixed-use developments. Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

S E C T I O N 3
Investing into the future through

land acquisitions

Investing into the future through land acquisitions Indian Real Estate: Betting on a 'Capital' Future
3.1
About 6,800 acres of land Figure 3.1.1 Investments in site across key regions* (2018-2022)
acquired for greenfield

developments since 2018; Mumbai Delhi-NCR
nearly one-third acquired Land ~960 Land
acquired ~1,760
in 2022 alone acquired acres acres
Land deals
67
Land deals
73 Investment USD 3.8 bn
Investment USD 3.8 bn Kolkata

Figure 3.1.2 Regional split of land acquisitions by area Land ~110
(2018-2022)
Pune acquired acres
Land ~450
Land deals
04
USD 0.1 bn
acquired acres
19% Investment
26% Land deals
27
Hyderabad
2%
Investment USD 0.6 bn Land
acquired ~970
acres
7%
Land deals
24
8% Bangalore Investment USD 0.9 bn
14%
Land
acquired
~700
acres Chennai
10%
14% Land deals
44
Land
acquired ~500
acres
Land deals
47
Delhi - NCR Hyderabad Mumbai Bangalore Investment USD 1.1 bn Investment USD 0.9bn
Chennai Pune Kolkata Others
*The total quantum of land acquired shown in image across different cities may not add up to 6,800 acres. This includes land acquired in other cities across India that spans nearly 1,300 acres.

3.2
Residential sector seeing heightened worth of capital
investment activity through site deals Figure 3.2.1: Sectoral split of investments in land (by acreage) deployed to drive
the next phase
Over USD of greenfield
2,500
2,000
12 billion development
With regards to the total investment flows in acquisition of sites, residential
Land area (acres)

1,500 and mixed-use land parcels accounted for nearly 60% of the total share.
Together these two sectors attracted over USD 7 billion worth of capital
1,000 flows, which is expected to lead to strong supply in the coming years.
500 Though land acquisition activity for greenfield office developments has
somewhat tapered over the past few years, the sector still accounted for
0 roughly 19% of the total investments in sites since 2018. However, given
2018 2019 2020 2021 2022
Residential I&l Mixed-use Office Data Centres Retail Others
that core investment-grade built-up office assets are hard to come by for
acquisition purpose, we expect to see higher investments in greenfield office
developments through land acquisitions going forward.
The land acquisition space has been buzzing with higher interest primarily
from developers in the recent past. On a cumulative basis, nearly 6,800 Figure 3.2.2 Cumulative share of investments for acquisition of sites
acres of land have been acquired by developers and investors during (2018-2022)
2018-22. The activity has especially accelerated in the past two years, with
nearly 60% of the land being acquired from January 2021 onwards.
Residential
30% Mixed-use
29%
The residential sector has seen the highest traction with a share of nearly
37% in the land acquired since 2018. This is due to the strong momentum
in housing sales that the sector has seen over the past two years; thereby
enabling developers to ride the wave. Office
19% I&L
09%
Industrial and logistics was another prominent sector which has seen
heightened activity specifically during the pandemic years (2020 and 2021).
The sector accounted for about one-fourth of the total land acquisition Data Centers
07% Retail
03%
carried out during 2018-22. Shorter construction timelines, limited
completed investment-grade warehousing assets, an evolving ecosystem
and consumption patterns made a strong case for investments in the I&L
space. Others
03%
3.3
Acquired land to unlock roughly
575-655 Mn sq. ft. of saleable
development potential; require
USD 32 -37 bn for construction Figure 3.3.1: Saleable development potential and investments required for construction development¹
Saleable development Capital required for construction

potential (million sq. ft.) development (USD billion)
Residential 250 - 290 10.5 -12.5

Mixed-use 140 - 155 6.0 – 7.5
Office 60 - 70 3.0 - 3.5
Industrial & Logictics 60 - 65 1.3- 1.5
Data Centres 50 - 60 9.5 - 11.5
Retail 5-7 0.3 – 0.5
Others 14 - 16 0.5 -0.7
575 - 655
1. Applicable floor space index (FSI) and per sq. ft. construction cost ranges considered for respective sectors.
~32 - 37
Source: Real Capital Analytics, VCCircle, Media releases, CBRE India Research, Q1 2023

S E C T I O N 4
Investment and development platforms

gaining traction
Investment and development platforms gaining traction Indian Real Estate: Betting on a 'Capital' Future
4.1
Investment and development platforms
worth USD 17 bn* established since 2018; Figure 4.1: Fund-raising trends across Investment and development platforms
to drive investments and RE activity
The Indian real estate sector has seen establishment of investment and 7
development platforms worth nearly USD 17 billion in the past five years. This
space has been gaining traction as over USD 11 billion, or almost 66%, of the
6
investments across these platforms were raised in the past two years alone.
With regards to capital allocation, investors have continued to prefer 5

income-producing or develop-to-core assets. The I&L sector accounted
for the highest share (>32%) of investments during this period with capital 4
commitments of over USD 5.5 billion. The commitments have grown significantly
USD Billion
with nearly 54% (USD 3 bn) of the total commitments within the I&L sector were
3
recorded in 2022 alone, signifying that capital deployment in the medium term
would remain strong.
2
This was followed by the office sector which recorded roughly 30% or over
USD 5 billion of reserved capital through these platforms since 2018. There 1
has been a consistent rise in capital commitments in the office sector over the
past few years, with 2022 accounting for nearly 37% (USD 1.9 billion) of the
0
total commitments. The trend is in tandem with the growing investments by
2018 2019 2020 2021 2022
institutional investors through the opportunistic route, with investment-grade
assets becoming limited for sale. It is noteworthy to mention that investors Office I&L Retail Residential Data Centres
have committed about USD 3 billion or nearly 18% of the capital for greenfield Source: VCCircle, News articles; CBRE India Research, Q1 2023
DC projects in the country.
We believe that investors would continue to prefer such platforms in the

medium- to long-term, as it allows them to spread the investment and
execution risk while maximizing returns. In addition, this route also leads to
higher synergies between marquee global investors, who bring long-term
patient capital and follow global best practices, and developers who bring
local market knowledge and expertise to the table. We believe that the much-
needed long-term patient capital would further strengthen the fundamentals of
the Indian real estate sector and even result in further institutionalization.
*Based on information available in public domain. It doesn't include deals that might be confidential or for which
the deal value has not been disclosed. This primarily includes committed capital or capital that is yet to be
deployed.

Investment and development platforms gaining traction Indian Real Estate: Betting on a 'Capital' Future
4.2.1
Key investment and development
platforms / JVs established* since 2018
PLATFORM 1 PLATFORM 2** PLATFORM 3 PLATFORM 4 PLATFORM 5
DATA CENTRE I&L RESIDENTIAL I&L OFFICE
Brookfield Bain Capital,

PARTNER 1 Asset Management Ivanhoe Cambridge
HDFC Capital Blackstone CPPIB
PARTNER 2 Digital Realty Macrotech (Lodha) Cerberus Capital NA Tata Realty
INVESTMENT USD 2 billion USD 1 billion USD 1 billion USD 0.9 billion USD 0.7 billion
Bangalore, Delhi-NCR,
TARGET REGION Pan India Pan India Pan India
Hyderabad and Pune
Top 7 cities
Source: VCCircle, News articles; CBRE India Research, Q1 2023

*Based on information available in public domain. It doesn't include deals that might be confidential or for which the deal value has not been disclosed. This primarily includes committed capital or capital that is yet to be deployed.
**All three partners own an equal (33.3%) share in the platform

S E C T I O N 5
Fund-raising through primary

capital markets
Fund raising through primary capital markets Indian Real Estate: Betting on a 'Capital' Future
5.1
Strong fund-raising activity through
IPO and QIP routes is back; USD 3.4 bn
Key IPOs and QIPs since 2018
raised since 2018
Enthused by the buoyant activity in the Indian capital markets, listed real
estate developers have raised over USD 2.9 billion since 2018 through the MACROTECH DEVELOPERS LTD. GODREJ PROPERTIES MACROTECH DEVELOPERS LTD.
qualified institutional placements (QIP) route. Nearly 60% of this amount
has been raised in the past two years alone. In addition, we have seen over
USD 500 million of funds being raised by three developers through the
initial public offering (IPO) route since January 2021. Furthermore, four ISSUE SIZE INR 2,500 crore ISSUE SIZE
INR 3,750 crore ISSUE SIZE
INR 3,547 crore
more developers with a major presence in the residential space have lined INR 2,100 crore
up their IPOs in the coming quarters*, as they have already filed the Draft
Red Herring Prospectus (DRHP) with Securities and Exchange Board IPO PERIOD April 2021
of India (SEBI). These developers plan to cumulatively raise about USD
350-400 million through this route. The funds raised through the IPO QIP PERIOD March 2021 QIP PERIOD December 2022
and QIP routes are expected to provide capital for portfolio expansion and
STATUS: Listed in April 2021 June 2019
general corporate purposes, and to reduce or repay debt to strengthen respectively
their balance sheets.
KEYSTONE REALTORS LIMITED DLF LTD. THE PHOENIX MILLS LIMITED
ISSUE SIZE INR 635 crore ISSUE SIZE INR 3,173 crore ISSUE SIZE INR 1,100 crore
IPO PERIOD November 2022 QIP PERIOD March 2019 QIP PERIOD August 2020
Source: Securities and Exchange Board of India, CBRE India Research, Q1 2023
* Based on the announcements made in public domain. The actual timing of the IPO will depend on factors
such as market conditions, management decisions and necessary approval from SEBI.
Listed in
STATUS: December 2022

Fund raising through primary capital markets Indian Real Estate: Betting on a 'Capital' Future
5.2
Over USD 2.3 bn raised by Indian
office REITs through IPO and QIP
REIT IPOs REIT QIPs
routes since 2019; several other
IPOs are in pipeline EMBASSY OFFICE PARKS REIT MINDSPACE BUSINESS PARKS REIT EMBASSY OFFICE PARKS REIT
Indian real estate saw its first REIT listing in 2019 when Embassy Office
Parks REIT raised USD 690 million (INR 4,750 crore) through its IPO.
Thereafter, two more office sector-dedicated REITs – Mindspace Business
Parks REIT and Brookfield India Real Estate Trust – floated their IPOs
ISSUE SIZE INR 4,750 crore ISSUE SIZE INR 4,500 crore ISSUE SIZE INR 3,680 crore
in 2020 and 2021, respectively which raised USD 605 million (INR 4,500
crore) and USD 520 million (INR 3,800 crore) respectively. Cumulatively,
the three REITs have raised over USD 1.8 billion (INR 13,050 crore) since
2019 from the primary market. In addition. EOP REIT has also raised nearly
IPO PERIOD April 2019 IPO PERIOD August 2020 IPO PERIOD December 2020
USD 500 million through the QIP route in 2020. The Indian REIT market is
expected to gain more depth and become more diversified with the launch
of several IPOs in the coming years as multiple REIT IPOs are in advanced
stages of regulatory and due diligence processes. We could see India’s
first retail sector-specific REIT and one more office sector REIT listing in
2023*, through which collectively ~USD 1 billion could be raised.
BROOKFIELD INDIA REAL ESTATE TRUST
ISSUE SIZE INR 3,800 crore
IPO PERIOD February 2021
Source: Securities and Exchange Board of India, CBRE India Research, Q1 2023
*Based on the announcements made in public domain. The actual timing of the IPO will depend on factors
such as market conditions, management decisions and necessary approval from SEBI.

S E C T I O N 6
Trends in the debt financing space

Trends in the debt financing space Indian Real Estate: Betting on a 'Capital' Future
6.1
Over USD 11.5 bn* debt raised by real estate companies since 2018; majority (~75%)
concentrated in key markets of Bangalore, Mumbai and Delhi-NCR
Figure 6.1: Real estate debt-raising activity Figure 6.2: Cumulative debt-raising activity across cities (2018-2022)
3
USD 11.5 bn
(During 2018-22)
USD Billion
1 KOLKATA 3%
OTHERS 6%
DELHI-NCR 13%
BANGALORE 31%
MUMBAI 29%
0 MULTIPLE CITIES 10%
2018 2019 2020 2021 2022 PUNE 4%
HYDERABAD 3%
Source: VCEdge, VCCircle, News articles; CBRE India Research, Q1 2023 Source: VCEdge, VCCircle, News articles; CBRE India Research, Q1 2023
*Based on information available in the public domain. It does not include confidential deals or those for which the deal value has not been disclosed.

Trends in the debt financing space Indian Real Estate: Betting on a 'Capital' Future
6.2
Trends in the real estate debt
financing space Preferred routes and segments Key active investors*
Preferred investment Preferred

strategy markets • Apollo Global
• Ares SSG
• Metros / tier- I cities –
top seven markets
• ASK Property Investment Advisors
• Structured-debt
• Mezzanine structure • Select tier-II cities
– Ahmedabad,
• Bain Capital
• Secured term loans Lucknow, Indore,
• Non-Convertible Kochi, Faridabad, • Edelweiss Capital
Debentures Chandigarh, Jaipur
• HDFC
• IIFL Asset Management
Major end-use of funds Top sectoral • Kotak Realty Fund
by developers bets
• Motilal Oswal Real Estate
• Construction of • Oaktree Capital
projects and last-mile
execution
• Piramal Capital & Housing Finance
• Repayment of high- • Residential:
cost debt Mid-income and • PAG
• Working capital affordable housing
• Financial closure • Office
*Based on information available in public domain.

S E C T I O N 7
Key emerging trends

Key emerging trends Indian Real Estate: Betting on a 'Capital' Future
7.1
Rising cost of capital could put pressure on margins
as major central banks raised key policy rates Cumulative change (Nov 2021-Mar 2023)
6.50% India 250 bps An aggressive fiscal and monetary stimulus

6.25% 6.50% announced simultaneously in most countries
5.90%
4.00%
5.40%
4.75-5.00% through 2020 and 2021 played a crucial
4.90%
4.40% 4.88% 475 bps role in offsetting the magnitude of the
4.00% 4.00% 4.00%
4.38% 4.63% US
3.88% COVID-19 induced slowdown and aided
3.13% faster economic recovery. However, these
2.38% 4.30%
measures have also been in part responsible
1.63% 4.3%
0-0.25% 0.88%
4.0%
UK 415 bps for fueling inflation, especially against the
3.5%
0.13% 0.13% 0.38%
3.0% backdrop of global supply chain disruptions.
2.3% Over the course of 2022, geopolitical risks in
1.8% Eastern Europe further aggravated the issue
1.3% 3.50%
0.10% 0.8%
1.0%
3.00% as inflation climbed to multi-decade highs in
0.5%
0.1% 0.3% 2.50% Europeon several economies. Thereafter, central banks
2.00% 3.50% 350 bps
Central Bank across the world acted in a synchronized
1.25% way to tame inflation by pivoting to a tighter
0.00% 0.50% 3.60%
3.10% 3.35% monetary policy. The pace of tightening
0.00% 0.00% 0.00% 0.00%
2.60% 2.85%
Australia 350 bps has been intense, particularly in advanced
2.35% 3.60%
1.85% economies. This has led to rise in cost of
1.35%
0.10% 0.85% capital thereby putting pressure on margins
0.35% and also leading to delays in decision-
0.10% 0.10% 0.10%
making by investors. Having said that, there
-0.10% -0.10% Japan 0 bps seems to be a directional change already
as inflation might have already peaked and
3.85%
we may already be in the middle of a policy
3.85% 3.85% 3.80% 3.65% stance change by most central banks.
3.70% 3.70% 3.65% 3.65%
China 20 bps
Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23
Source: Central bank websites; CBRE India Research, Q1 2023

7.2 Broad categories of eligible projects as per SEBI

Green finance: Opportunities abound Key Policy Initiatives 23
and / or GoI's green debt securities frameworks23
According to the World Economic Forum, buildings account for nearly 40% of global
greenhouse gas emissions and 40% of raw material use. Therefore, assessing and
imbibing sustainability practices into real estate and construction is paramount for
2017 2022 2022 2023 Green buildings Clean transportation
countries to be able to achieve their sustainability goals. GoI to launch
a Green Credit
The G20 uses the term “Green Finance” as a broad umbrella term that refers to The RBI Programme Energy efficiency Climate change adaptation
the major shift in financial flows required to support projects that benefit the liberalized the to incentivize
environment and society by reducing pollution or tackling climate change. ECB norms to environmentally
Sustainable water and Sustainable management of living
SEBI established enable green sustainable waste management natural resources and land use
a regulatory projects across GoI issued a and responsive
framework for industries and framework for measures taken
the issuance and sectors to tap the issuance by companies, Pollution prevention Terrestrial and aquatic
listing of green this window for of sovereign individuals and and control biodiversity conservation
debt securities raising finance green bonds local bodies.
Renewable energy
Figure 6.2: Tracked green finance investments and the estimated finance
required to meet current Nationally Determined Contributions (NDCs) in India
140
120
Approx. finance required
~USD 133 Bn
174%
increase in green finance
Further opportunities
exist as India is estimated
to require around INR
100
flows in India from
INR 11
USD Bn
80
~ INR 1.1 lakh crore (USD 13.3
60 billion) in FY 2017 to lakh crore
40 INR 3.0 lakh crore (USD 36.2 (USD 132.9 billion)
20 billion) in FY 202024. annually to meet its
0 climate targets24.
FY17 FY18 FY19 FY20 Sources: CBRE India Research, Q1 2023
23: SEBI, RBI; PTI, Government of India; CBRE Research, Q1 2023
24: Landscape of Green Finance in India 2022, Climate Policy Initiative, August 2022

7.3.1
Interest in alternates – Figure 7.3.1: Cumulative investments in DCs (2018 – 2025E)
Data Centers gaining momentum
25
DC Investment in USD
India Expected to
Cross 20bn
by 2025
20
15
USD Billion
DCs are the top real estate alternate choice for investors across the globe – a trend
we have recorded over the past few years.
10
Along with rising end-user demand, CBRE expects the investments in DCs to scale
new heights due to emerging preference among investors for assets providing stable
income streams. As a result, there are significant opportunities for experienced 5
investors and operators to partner with global stakeholders looking to benefit from
their sector expertise.
0
Over the last five years, the Indian DC market witnessed investment announcements 2018 2019 2020 2021 HI 2022 2023-2025E
of about USD 14 billion1 in this sector. The recent government announcement to
grant the coveted ‘infrastructure status’ to DCs is expected to further ease access Note - *investments considered for this analysis include MoU signed, proposed and ongoing deals
to global capital for stakeholders through the external commercial borrowing route. Source: 'Data Centres in India - Powering Up Real Estate in a Data High Era', September 2022;
CBRE India Research, Q1 2023
Therefore, we anticipate that the cumulative DC investments would cross USD 20
billion by the end of 202525. Most of this investment is in developments, with existing
DC stock in India being at nearly 680 MW. As per our estimates, this is anticipated to
grow by 50% in 2023 to cross 1,000 MW.
25. Data Centres in India - Powering Up Real Estate in a Data High Era_ September 2022; CBRE India Research,
Q1 2023

7.3.2
Investment models adopted in the
Data Centres space
Figure 7.3.2: Key investment DC models
Shell & core Powered shell Fully fitted Turnkey / built-to-suit
• The landlord is either the • The landlord is either the • The landlord is a DC operator • The landlord is a DC operator
building owner or the building owner or the and the lessee is the corporate and the lessee is the corporate
developer and the lessee is a developer and the lessee is a client(s) client (s)
DC operator DC operator
• The landlord leases either • Platform level deal involving
• The landlord leases the bare • The landlord leases the bare a portion / whole DC to the either a large DC or multiple
shell building (also known shell building along with the corporate client DCs including SLAs*, supplier
as shell & core) to the DC dual power source to the DC contracts, liabilities, etc.
operator operator • Lessee pays the rent on a
price / kW basis • Rent structuring is customised
• Lessee invests in power, M&E • Lessee invests in M&E and
and fitouts and pays rent for fitouts and pays rent for the • Landlord obligations cover • Landlord obligations cover
the bare shell building only bare shell building and a all operational and capital all operational and capital
premium for the power source expenses expenses
• Landlord obligations are
limited to only civil structural • Landlord obligations are • Lease tenure: • Lease tenure:
expenses as part of a triple net limited to only civil structural » Retail: 3-5 years with » 15+ years with renewal
lease expenses as part of a triple net renewal options options
lease
• Lease tenure - 15+ years » Wholesale: 5-10 years with
• Lease tenure - 15+ years renewal and mid-term
break clauses
Increased operational exposure for DC landlords
Source: 'Data Centres in India - Powering Up Real Estate in a Data High Era', September 2022; CBRE India Research, Q1 2023

S E C T I O N 8
The way forward

The way forward Indian Real Estate: Betting on a 'Capital' Future
8.1.1
Key takeaways from our 2023 APAC
Investor Intentions Survey (1/3)
CBRE conducted the 2023 Asia Pacific Investor Intentions Survey in November and
December 2022. Over 500 responses were received from participants who were
asked a range of questions related to their buying intentions, perceived challenges
and preferred strategies, sectors and markets for 2023. Over the next few pages, we
have covered some of the key takeaways from this survey.
Figure 8.1.1: Dry powder of APAC focused RE funds
60
50
Dry powder (USD Billion)
40
30
20
10
0
2006
2008
2009
2005
2007
2020
2022
2010
2014
2016
2018
2019
2012
2013
2015
2017
2021
2011
Core Core-plus Value-add Opportunistic Debt Distressed assets Fund of funds
Source: 2023 APAC Investors Intentions Survey, CBRE Research, January 2023
• Dry powder targeting Asia Pacific real estate reached a new threshold of USD
65.8 billion by the end of 2022. Opportunistic and core strategies dominated,
accounting for 65% of total existing dry powder.
• With fund managers having raised the largest amount of capital for opportunistic
strategies, there will be a substantial volume of uninvested capital sitting on the
sidelines waiting to be deployed.

8.1.2
Figure 8.1.2: Preferred investment strategies in APAC in 2023 • Opportunistic strategies along with distressed assets and non-performing loans
will attract more attention from investors in APAC (Fig 8.1.2) this year amid rising
26% hopes of dislocated assets becoming available. Opportunistic investors are
Core 23% also keen on identifying potential opportunities between the public and private
19%
21% markets. We received similar responses from India with majority of the investors
Core-plus 24% polled (Fig. 8.1.3) said that they would be more inclined towards opportunistic
23% bets in 2023.
25%
Value-add 27%
22% • I&L (Fig 8.1.3) was named the most popular asset class across most strategies in
20% APAC as the sector continues to enjoy strong tailwinds from structural changes
Opportunistic 19% such as the growth of e-commerce along with robust market fundamentals. In
22%
8%
contrast, a majority of the Indian respondents preferred residential followed by
Distressed
assets and NPL 7% I&L sectors for investment in 2023.
9%
0% 10% 20% 30% Figure 8.1.4: Preferred investment strategies in India in 2023
2021 2022 2023
Source: 2023 Asia Pacific Investor Intentions Survey, CBRE Research, January 2023
Debt strategies 10%
Figure 8.1.3: Preferred sectors for investments in APAC in 2023
Core 10%
Core
Core plus 10%
Core-plus
Value-add Distressed assets and NPL 14%
Opportunistic
Value-add 14%
Debt strategies
Opportunistic 43%
Distressed assets
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 20% 40% 60% 80% 100%
Office Industrial and logistics Retail Hotels / Resorts Residential Others

Source: 2023 Asia Pacific Investor Intentions Survey, CBRE Research, January 2023 Source: 2023 Asia Pacific Investor Intentions Survey, CBRE Research, January 2023

8.1.3
Figure 8.3.1: Major challenges facing real estate investment in APAC in 2023 Figure 8.3.3: Major challenges facing real estate investment in India in 2023
Fears of a recession and further policy rate increases ranked as the top two
concerns for investors at an APAC level in this year’s survey. Although economic
Fear of a recession and
economic uncertainty
Mainland China,
Hong Kong SAR,
Singapore
Mismatch in buyer and
seller expectations 62% growth in Asia Pacific is forecasted to come in below trend, investors are closely
monitoring shifts in central bank policy and the potential for further interest rate
hikes. Investors with exposure to India highlighted mismatch in buyer and seller
expectations, and policy rate hikes by the central banks as the top two concerns
Central bank policy
57%
Central bank policy facing real estate investments in 2023.
(e.g., overly aggressive interest Australia, Japan, (ex. Too aggressive with interest rate hikes,
rate hikes, not enough India, New Zealand not enough quantitative tightening)
quantitative tightening)
52%
Mismatch in buyer and
seller expectations Korea
Fear of a recession
Uncertain geopolitical landscape
(ex. Ukraine, East Asia)
Shift in credit availability

and loan terms
Uncertain geopolitical landscape
(ex. Ukraine, East Asia)
43%
Higher and/or more
persistent inflation
Higher and/or more
persistent inflation
38%
Impact of currency fluctuation Mainland China,
Japan
Shift in credit availability
and loan terms
33%
14%
0% 20% 40% 60% 80% Impact of currency
fluctuations
2022 2023
Source: 2023 APAC Investor Intentions Survey, CBRE Research, Q1 2023 Source: 2023 APAC Investor Intentions Survey, CBRE Research, Q1 2023

8.2
Sectoral outlook and
recommendations
A broad analysis of the Q1 2023 data showed that development sites / land
acquisitions dominated investment flows with a share of about 49%, followed by the
office sector (26%). Domestic investors (primarily developers) led the inflows in Q1
2023 with an almost 73% share; institutional investors garnered the remaining share.
In terms of the geographical spread, Delhi-NCR (15%) followed by Mumbai (14%)
dominated investment inflows during Q1 2023. Office I&W Retail Residential Alternates
We anticipate that investment flows in real estate would remain steady over the
next two years, with about USD 16-17 billion of cumulative inflows expected during Predominantly Value-add
Predominantly
this period. Going by the historical and prevailing trends and the available capital Blend of core opportunistic in in gateway Primarily
opportunistic
with the existing investment platforms that have been raised over the past 2-3 Investment strategy and core-plus; key urban cities, cities; majorly opportunistic;
selectively mix of core-plus opportunistic otherwise majorly Data Centres to be
years, we expect the office sector to continue to garner a majority share of the
opportunistic and opportunistic across tier-I and II structured-debt high on investors’
total institutional inflows, followed by the I&L sector and site / land parcels. We in tier-II towns cities
also believe that investments in alternates, specifically in DCs could gain further radar
momentum. Furthermore, we believe that metros and tier-I cities would continue
to be the major recipients of the equity inflows during this period. Having said so,
tier-II cities could see rising level of investments on the back of increased real estate
development activity backed by a healthy demand, particularly in the retail and I&L Mix of Largely
Both brownfield Predominantly
sectors. Development type brownfield and greenfield Greenfield
and greenfield greenfield
greenfield projects
Gateway cities Metro / tier-I cities, Mumbai,

Across tier-I Top seven cities
Preferred markets – Mumbai, selective entry / Bangalore,
and select tier-II and select tier-II
Delhi-NCR and expansion in tier-II Hyderabad and
cities cities
Bangalore cities Delhi-NCR
Source: CBRE India Research, Q1 2023

8.3
Key themes expected to play
out in 2023
Expansion in yields
Partnership models Heightened activity can’t be ruled out;
to gain further through opportunistic REITs landscape to financing cost to go Data Centres high
traction bets get more diverse northwards on investors radar
The year 2022 recorded the While core and core-plus The year 2023 could see the There is a mismatch in buyer India saw mega
second highest (USD 5 billion) investment strategies would listing of India’s first retail and seller expectations in yields announcements and
commitments in investment continue to be preferred by REIT, which could add more across core sectors. In addition, significant capital
and development platforms. major foreign investors, we depth to the REIT market in the nearly 240 bps increase in deployment into DCs over
We anticipate the trend to could see greater activity India. In addition, churn in repo rate has narrowed down the past two years. Nearly
continue this year as well, with via the opportunistic route investor base in listed office the spread between 10-year 500 acres of land has been
major commitments to be made amidst limited availability of REITs could continue as select G-Sec and rental yields from acquired during this period,
in the office and I&L sectors. investible-grade assets that foreign investors look to pare real estate assets. We anticipate pegging the acquisition cost
We could also see higher are up for sale. In addition, their stake. Furthermore, the that a temporary expansion alone at over USD 1 billion.
traction in the data centres there is a considerable government's recent move to in yields (25-50 bps) can’t be In addition, investment and
and the residential segment interest that we are amend its original proposal to ruled out amidst the prevalent development platforms
with strong demand and witnessing in greenfield tax distribution of 'repayment macro-economic setup. Besides, for developing DCs have
policy thrust lifting the overall developments across all core of debt' in the hands of unit with the increase in policy rates, been set up, entailing an
sentiments. In fact, Indian real sectors. The fact that 2022 holders is likely to ensure that the cost of financing has gone investment of over USD 3
estate is going through a rapid was a landmark year in terms REITs remain an attractive up considerably in the past one billion. With the accelerated
institutionalization phase, of land activity is indicative investment instrument. After year. This might push investors adoption of digitization post
wherein even the newer set of the long-term bets that the amendment, the debt and developers to re-evaluate the pandemic and strong
of institutional investors are investors are willing to take repayment component that their project viability and deal policy thrust from the
backing developers to ride on the RE sector in India. would attract a tax will be structures. government, we anticipate
the growth momentum being calculated only after deducting the investment momentum
witnessed across sectors. the cost of acquisition of units. in DCs to continue in 2023.
Thus, only a small portion
would attract capital gains tax
at the time of sale of units.

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Nikhil Bhatia Vamshi KK Nakirekanti

Vidhi Dheri Managing Director & Co-Head, Capital Markets, India Senior Executive Director and Head, Valuation Services,
Director - Research India: Head, Consulting and Valuations, South East Asia;
nikhil.bhatia@cbre.co.in
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Vineet.sharma1@cbre.com Saurabh.Khare@cbre.co.in
CBRE Research
CBRE confirms that information contained in this report, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. Whilst all reasonable care has been taken to ensure
that facts stated are accurate and the opinions given are fair and reasonable, given the unorganized nature of the real estate market in the country and the limited information available in the public domain, neither CBRE, nor any director or employee of CBRE shall in any way be responsible for the accuracy of the data
obtained from third parties.
CIN - U74140DL1999PTC100244
Business Line Contacts
Advisory & Transactions Consulting & Valuation Global Workplace Solutions

Ram Chandnani Rami Kaushal Rajesh Pandit
Managing Director, Managing Director, Managing Director,
Advisory & Transaction Services, India Consulting & Valuations, India, Middle East & Africa Global Workplace Solutions, India & Property
ram.chandnani@cbre.co.in rami.kaushal@cbre.co.in Management, India, SE Asia, Middle East & North Africa
rajesh.pandit@cbre.co.in
Capital Markets Capital Markets Project Management

Gaurav Kumar Nikhil Bhatia Gurjot Bhatia
Managing Director & Co-Head, Managing Director & Co-Head, Managing Director,
Capital Markets, India Capital Markets, India Project Management, India, SE Asia, Middle East & Africa
gaurav.kumar@cbre.co.in nikhil.bhatia@cbre.co.in gurjot.bhatia@cbre.co.in
CBRE Research
© Copyright 2023. All rights reserved. This report has been prepared in good faith, based on CBRE’s current anecdotal and evidence based views of the commercial real estate market. Although CBRE believes its views reflect market conditions on the date of this presentation, they are subject to significant uncertainties
and contingencies, many of which are beyond CBRE’s control. In addition, many of CBRE’s views are opinion and/or projections based on CBRE’s subjective analyses of current market circumstances. Other firms may have different opinions, projections and analyses, and actual market conditions in the future may cause
CBRE’s current views to later be incorrect. CBRE has no obligation to update its views herein if its opinions, projections, analyses or market circumstances later change.
Nothing in this report should be construed as an indicator of the future performance of CBRE’s securities or of the performance of any other company’s securities. You should not purchase or sell securities—of CBRE or any other company—based on the views herein. CBRE disclaims all liability for securities purchased or
sold based on information herein, and by viewing this report, you waive all claims against CBRE as well as against CBRE’s affiliates, officers, directors, employees, agents, advisers and representatives arising out of the accuracy, completeness, adequacy or your use of the information herein.
CIN - U74140DL1999PTC100244

Indian Real Estate - Betting On A Capital Future - April 2023 - Final

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Indian Real Estate - Betting On A Capital Future - April 2023 - Final

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I N T ELLIG ENT INVESTMENT

Indian Real Estate:

CBRE RESEARCH APRIL 2023

Investing into the

India: A land of promising opportunities

3 CBRE RESEARCH ©2023 CBRE, INC.

4 CBRE RESEARCH ©2023 CBRE, INC.

5 CBRE RESEARCH ©2023 CBRE, INC.

6 CBRE RESEARCH ©2023 CBRE, INC.

Residential housing stock saw

7 CBRE RESEARCH ©2023 CBRE, INC.

Equity investment landscape in

8 CBRE RESEARCH ©2023 CBRE, INC.

until date, exceeding the pre-pandemic (2019) levels by over 22%.

9 CBRE RESEARCH ©2023 CBRE, INC.

Tier-I cities remained the major recipients of

Delhi-NCR followed by Mumbai and Bangalore dominated investments in

25% 21% 16%

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Office Site Retail I&L Office Site

Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

Institutional investors have consistently been a major source of capital

12 CBRE RESEARCH ©2023 CBRE, INC.

Foreign investors collectively pumped in nearly USD 4.4 billion in 2022,

On a cumulative basis (2018-2022), foreign investors have deployed in excess of

Source: Real Capital Analytics, VCCircle, CBRE India Research, Q1 2023

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firm and investment company

development alternative investment

14 CBRE RESEARCH ©2023 CBRE, INC.

2018 2019 2020 2021 2022

— GLP — LOGOS — Marubeni — Cerberus — Credberg

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In terms of sectoral bets, developers have primarily infused capital to acquire

services group and an EMEA based

commercial and residential real estate

16 CBRE RESEARCH ©2023 CBRE, INC.

Meanwhile, developers have predominantly been pumping money through 1 Value-add

17 CBRE RESEARCH ©2023 CBRE, INC.

Investing into the future through

18 CBRE RESEARCH ©2023 CBRE, INC.

acquired for greenfield

Investment USD 3.8 bn Kolkata

19 CBRE RESEARCH ©2023 CBRE, INC.

Land area (acres)

Saleable development Capital required for construction

Residential 250 - 290 10.5 -12.5

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Investment and development platforms

With regards to capital allocation, investors have continued to prefer 5

We believe that investors would continue to prefer such platforms in the

23 CBRE RESEARCH ©2023 CBRE, INC.

PLATFORM 1 PLATFORM 2** PLATFORM 3 PLATFORM 4 PLATFORM 5

DATA CENTRE I&L RESIDENTIAL I&L OFFICE

Brookfield Bain Capital,

PARTNER 2 Digital Realty Macrotech (Lodha) Cerberus Capital NA Tata Realty

Source: VCCircle, News articles; CBRE India Research, Q1 2023

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Fund-raising through primary

KEYSTONE REALTORS LIMITED DLF LTD. THE PHOENIX MILLS LIMITED

26 CBRE RESEARCH ©2023 CBRE, INC.

BROOKFIELD INDIA REAL ESTATE TRUST

Advisory & Transactions Consulting & Valuation Global Workplace Solutions