Affordable housing, logistics to get a boost from Sovereign Wealth Funds

SWFs hold USD 29 billion of Assets Under Custody (AUC) as of December 2019
The measures announced recentlywithin the Union Budget granting 100% tax exemption on interest, dividend and capital gains income to Sovereign Wealth Funds (SWFs) investing in infrastructure, will further help boost investments in affordable housing and logistics, says JLL Research. India seems to possess gained a serious impetus following some positive policy backing and therefore the ecosystem generally thus helping boost the image of the country as a favourite with SWFs.
Sovereign Wealth Funds are state-ownedinvestment commonly established with revenues generated from trade surpluses, financial institution reserves, currency operations, privatisations and transfer payments. Between 2008 -18, global Assets Under Management (AUM) of SWFs grew at a CAGR of 10% with Asia garnering the very best share (42%).
“Sovereign wealth fundsare playing a pivotal role in investments globally with estimated AUM of 8.1 trillion as of 2019. Investments by SWFs in India improved sharply as a results of various policy measures introduced to draw in foreign investments. The Union allow 2020 has further incentivized SWFs to take a position in infrastructure including affordable housing and warehousing by providing tax exemptions. the increase in potential returns is predicted to drive more SWF investments in India. SWFs would be more inclined to use the direct investment route as compared to investment platforms,” said Ramesh Nair, CEO and Country Head, JLL India.
India emergingbecause the favourite destination for SWFs
Investments by SWFs improved sharply as various policy measures were introducedto draw in foreign investments. In India, SWFs hold USD 29 billion of Assets Under Custody (AUC) as of December 2019. Of these, land and warehousing account for 22% of the AUC, amounting to USD 6.6 billion.
“SWF Investments quadrupled to USD 5.3 billion during 2014-19 from USD 1.3 billion recorded between 2005 and 2013,thanks to various reforms introduced within the land sector. Going forward we expect more traction from this sort of patient capital,’ said
Dr Samantak Das, Chief Economist and ED, JLL India.
.
Strong interest of SWFs in India
Source : National Securities Depository Limited, Securities and Exchange Board of India and JLL Research
The Unionallow 2020 further incentivizes SWFs to take a position in infrastructure by providing them a 100% tax exemption on interest, dividend and capital gains income in respect of investment made in infrastructure and other notified sectors before 31st March, 2024 with a minimum lock-in period of three years.
The resultant increase in potential returnsis predicted to spice up investments by SWFs in affordable housing and logistics & warehousing which are accorded infrastructure status.
The measures announced recently
Sovereign Wealth Funds are state-owned
“Sovereign wealth funds
India emerging
Investments by SWFs improved sharply as various policy measures were introduced
“SWF Investments quadrupled to USD 5.3 billion during 2014-19 from USD 1.3 billion recorded between 2005 and 2013,
Dr Samantak Das, Chief Economist and ED, JLL India.
.
Strong interest of SWFs in India
Source : National Securities Depository Limited, Securities and Exchange Board of India and JLL Research
The Union
The resultant increase in potential returns
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