Capital outflows into commercial realty up 92%

New Delhi: Capital investment in commercial real estate by Indian investors in overseas markets soared by 92 per cent to $700 million (around Rs 4,893 crore) between the first quarter of 2018 and the first quarter of this year, a report said.

Investors tapped the overseas market to diversify risk and increase their returns, the report by global property consultant Knight Frank said.

The UK, the Netherlands, Germany, the US and Australia were the top destinations for Indian capital investments. The report delves into the sources and destinations of cross-border investments in commercial real estate.

"With geopolitical factors coming into play, prolonged global economic cycle and interest rate in late cycle investment are prompting cross-border capital flows," said Shishir Baijal, CMD, Knight Frank India.

Baijal further noted that "Indian investors are increasingly looking at international commercial real estate assets to diversify risk and increase their returns."

Meanwhile, cross border investment into Indian commercial real estate accounted to $2.6 billion during the period under review. With investment of $2.6 billion, India was ranked 20th among the top capital importing countries globally, while China was at the 6th position with an investment of $14.30 billion.

The US was the top capital importing country globally with an investment of $80.89 billion. The report noted that the US also topped the list of capital exporting countries globally, with an investment of $59.62 billion, followed by Canada ($50.41 billion) and Germany ($24.50 billion).

As per the report, Singapore overtook Hong Kong as Asia-Pacific's top source for outbound capital. Singapore has already invested more than $4 billion in China, South Korea, the UK and Australia in January-March 2019, reflecting several landmark cross-border deals.

With investment of $704.15 million, Singapore was the biggest capital source country for Indian commercial real estate between the first quarter of 2018 and the first quarter of 2019, followed by Australia (investment of $98.65 million) and Japan ($25.36 million).