Why Wall Street is pouring millions into India’s real estate sector

Canadian investors may want to sit up and pay attention to India’s real estate market as Wall Street has recently upped its commitment to the real estate sector, which is estimated to be worth $180 billion by 2020.

In the last few months, global giants, including Goldman Sachs, Warburg Pincus and Blackstone, have invested more than US$910 million in Indian real estate firms, a far cry from the last couple of years when investors shied away from India’s real estate industry.

“The sentiments had started improving right after the results of general elections in 2014,” Anuj Puri, chairman and country head of JLL India, a real estate consultancy, told the website Quartz.

Over the past five months Goldman Sachs has invested $300 million in real estate development and income-producing assets in India.

“The government’s focus on simplifying regulation and boosting economic growth will kick-start investment and consumption,” Ankur Sahu, co-head of private equity at Goldman Sachs in Asia, said in a statement.

The country’s real estate sector has been recovering from the global financial crisis, but experts see the long-term outlook as promising.

“The inherent Indian demographics still makes the country’s real estate sector attractive. But if you are looking at short-term gains, then that continues to be a challenge,” said Shashank Jain, partner, transaction services and real estate deals leader at PwC India. “The long-term story is intact.”

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