Institutional investment inflows in Indian realty touch USD 1.1 bn during Q3 2024 (July -Sept), up 45%: Colliers

• Q3 2024 attracted USD 1.1 Bn inflows, 45% higher over Q3 2023
• Office segment drove over half of the investments in Q3 2024, followed by residential with 33% share
• Domestic investments accounted for 44% of the total investments during the quarter
• Chennai & Mumbai cumulatively attracted 57% of the inflows in Q3 2024

Mumbai, October 03, 2024: Sustained confidence in Indian economy continued to drive institutional investments into the real estate sector, reaching USD 4.7 billion during the first three quarters of 2024, almost at par with the corresponding period in 2023. Following significant inflows in the first two quarters, Q3 2024 too registered healthy investment inflow of about USD 1.1 billion, reflecting a 45% YoY growth. Office segment accounted for 54% of the total investments during the quarter, followed by residential, with a 33% share. Residential inflows during Q3 2024 were particularly driven by domestic capital. Overall domestic investments remained robust at USD 0.5 billion, driving 44% of the total inflows during the quarter.  

“Institutional flows in Indian realty remain consistent, indicating sustained investor confidence. The investors are well diversified between global and domestic capital. While office assets remain a key focus, industrial & warehousing and residential segments are gaining significant momentum. The newer emerging themes like fractional ownership in office & warehousing, residential platforms with developers, flexible credit, and hospitality are driving opportunities for investors. Of the total USD 4.7 billion institutional inflows during the first nine months of 2024 (Jan-Sept), over 60% were directed towards industrial & warehousing and residential assets. With continued momentum, 2024 is expected to end on a higher note, likely surpassing 2023 volumes,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.

In addition to continued traction in domestic capital, foreign investors also maintained a sizeable and a healthy appetite for Indian real estate. At USD 0.6 billion inflows in Q3 2024, foreign investments have more than doubled compared to the investments witnessed in Q3 2023.

Investment inflows (USD million) Q3 2024–

*Note: Alternate assets include data centers, life sciences, senior housing, holiday homes, student housing, schools etc. (Investment inflows in alternate assets were limited in both Q2 and Q3 2024)

**Investment inflows in Retail were limited in Q3 2023, Q2 2024 & Q3 2024

Source: Colliers

Investment inflows (USD million) YTD 2024 –

*Note: Alternate assets include data centers, life sciences, senior housing, holiday homes, student housing, schools etc.

**Investment inflows in Retail were in YTD 2023 and YTD 2024

Source: Colliers 

Quarterly investments in Office segment surged by 6.8X times over Q3 2023

After witnessing subdued activity in the previous quarter, investments in the office segment doubled on a QoQ basis, at USD 0.6 billion inflows. At the same time, investments also rose by 6.8X times as compared to the same period last year. Foreign investments accounted for 88% of the total inflows into the segment during Q3 2024. Going forward, robust demand and supply momentum in Grade A office spaces across the top markets will keep the investor confidence buoyant.

Apart from office assets, residential assets too witnessed notable inflows during the quarter at USD 0.4 billion, witnessing a substantial surge of 40% on a YoY basis.

“Private equity investments in the residential segment are on the rise, fuelled by home-ownership trends and growing interest from domestic as well as foreign institutional investors. In the first nine months of 2024, investments in the segment crossed USD 1 billion, marking a significant 46% year-on-year increase. Q3 2024 alone saw USD 0.4 billion in residential investments, accounting for one-third of the total investments in the quarter. Most of these investments were directed towards developmental assets, as institutional investors continue to partner with reputed developers in marquee residential projects. With a conducive domestic environment, ongoing festive season and a much-anticipated reduction in interest rates, investor confidence in India’s residential real estate market is poised to remain intact,” said Vimal Nadar, Senior Director and Head of Research, Colliers India. 

Chennai & Mumbai together drove about 57% of the quarterly inflows 

Chennai and Mumbai together accounted for about 57% of the total inflows during Q3 2024 backed by key acquisitions in office segment. Almost 70% of the inflows in Chennai during the quarter were driven by foreign investments. Mumbai and Delhi NCR cumulatively witnessed about 44% of the total quarterly investments in the residential segment. Furthermore, multi-city investments corresponded to 30% of the overall inflows during Q3 2024 and were predominantly directed towards office and residential asset classes. 

City-wise investment inflows in Q3 2024 –

Source: Colliers

Note: * Investment inflows in Hyderabad were limited in both quarters

 Corporate Comm India (CCI Newswire)