In its latest report Knight Frank said India’s outbound capital in commercial real estate stood at $0.7 billion in the 12 months to the January-March quarter of 2019, with the UK, the Netherlands, Germany, the US and Australia being the top destinations.
Cross-border capital flows into commercial real estate in India touched $2.6 billion in FY19 on account of several factors, including geopolitical issues and a prolonged global economic cycle. On the other hand, outbound cross-border investments stood at $0.7 billion during the same period, property consultants Knight Frank has said.
In its latest report Knight Frank said India’s outbound capital in commercial real estate stood at $0.7 billion in the 12 months to the January-March quarter of 2019, with the UK, the Netherlands, Germany, the US and Australia being the top destinations. Inbound cross-border investment volumes into commercial real estate stood at $2.6 billion with the top five destinations being Singapore, Australia, Japan, China and Hong Kong.
“With geopolitical factors coming into play, prolonged global economic cycle and interest rate in late cycle investment is prompting cross-border capital flows. The Indian investors are increasingly looking at international commercial real estate assets to diversify risk and increase their returns,” Knight Frank India chairman and MD Shishir Baijal said.
Its Capital 2019 report, which delves into sources and destinations of cross-border investments in commercial real estate, highlights five themes shaping the next phase of global real estate investment — late cycle investing, capital gravity, reinvention of capital, ‘nownership’ and the value of data.
Between the first quarter of 2018 and that of 2019, the total outbound capital from Asia Pacific fell 34% to $57 billion from $88 billion with the region coming in third behind North America ($110 billion) and Europe ($104 billion), due in part to significant fall in outbound capital from China.
“In the past 12 months, outbound capital from Asia-Pacific, and Singapore in particular, has sought out alternative asset classes in Western markets while reducing their exposure to retail assets in the region, previously thought of as a core asset class,” said Knight Frank Asia Pacific head for capital markets Neil Brookes.
India is still far behind compared with other countries in attracting cross-border capital in commercial real estate. Knight Frank ranks India 20th in the aspect of top capital importing countries, globally. In terms of outbound cross-border investments, the country ranks 30th.
Between Q1 of 2018 and Q1 of 2019, China was a net importer of capital and Asia Pacific’s largest recipient of cross-border capital, edging ahead of Australia. South Korea was the only other Asian entrant in the top 10 destinations globally for cross-border investment.