New Delhi, October 14
Total equity investments in the real estate sector mark a record USD 8.9 billion during the first nine months of 2024, reflecting a 46 per cent year-on-year (Y-o-Y) growth, surpassing the USD 7.4 billion recorded for the entire year of 2023, according to CBRE South Asia report.
The report says India's real estate sector has witnessed this surge in equity investments, recording the highest-ever levels since 2018.
The report highlights a substantial quarterly equity investment of USD 2.6 billion during July-September 2024. Leading the charge were Mumbai, Bengaluru, and Chennai, which collectively accounted for 66 per cent of the equity inflows in Q3 2024, drawing USD 0.96 billion, USD 0.40 billion, and USD 0.34 billion, respectively.
Delhi-NCR, Pune, and Hyderabad also saw significant investment activity, with capital inflows of USD 0.31 billion, USD 0.27 billion, and USD 0.02 billion, respectively.
The increased investment momentum was largely driven by domestic investors, primarily developers, who contributed nearly 79 per cent of the equity capital inflows during the July-September quarter.
Among foreign investors, Singapore accounted for approximately 73 per cent of the total inflows, followed by the United States at 22 per cent.
Developers activity saw a significant uptick during the quarter, with developers representing nearly 47 per cent of the total equity investments, followed by institutional and collective vehicle investors at approximately 36 per cent.
Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE, said, "Investment activity in India's real estate market scaled a new peak in 9M 2024, on the back of a resurgence in capital deployment in Q2 2024 (Apr-Jun '24)."
He added, "Sustained capital inflows are expected in both traditional and emerging sectors in the upcoming quarters, while institutional and collective vehicle investors, along with developers, are expected to drive the overall capital flows".
Land and development sites emerged as the most attractive investment segments, accounting for 45 per cent of the total investments during Q3 2024.
The office sector attracted 24 per cent of the investments, while the retail sector saw a resurgence with a 22 per cent share of the capital inflows.
Within the land acquisitions, approximately 56 per cent of the capital was directed towards residential developments, while the remainder was committed to retail, data centres, warehousing projects, hospitals, and other uses.
Additionally, investment and development platforms worth approximately USD 235 million were established in the hotels and residential sectors during the July-September quarter, further underscoring the sector's growth trajectory.
The trend towards metro and Tier-I cities is expected to persist, although opportunities in smaller Tier-II locations are also gaining attention, especially following SEBI's recent regulations on small and mid-sized real estate investment trusts (SM REITs).