Institutional investments in real estate touch a 3-year high at USD 2.5 bn in Q2 2024
Jul 03, 2024
New Delhi [India], July 3 : The institutional investment in the second quarter (Q2) of 2024 increased to USD 2.5 billion inflows compared to the steady start in the first quarter, Colliers India, a real estate company, said in its recent report.
Among the different segments, industrial and warehousing saw an inflow of USD 1.5 billion, with the highest share of 61 per cent of total investments. Both segments saw the largest deals, as per the report.
It underscores that the surge in industrial warehousing, and residential investments resulted in a healthy investment volume of USD 3.5 billion for H1 2024 at an overall level, making up for the slow start in the first quarter. Foreign investments remained robust, accounting for 81 per cent of the total inflows in the second quarter of 2024, predominantly led by investors from the US and UAE.
During Q2 2024, the institutional investments in the industrial and warehousing segment rose manifold, as the report observed 11X times compared to Q2 2023 led by select large deals in the segment.
According to the report, the residential segment witnessed a significant rise in quarterly inflows, 7.5X times compared to the second quarter of 2023, capturing a 21 per cent share of total institutional inflows into Indian real estate.
"Amidst rising demand for superior-quality Grade A supply and evolving supply-chain models, investor confidence in the segment has significantly improved, the report added.
In contrast, with USD 0.3 billion of investments in office assets, the segment witnessed subdued activity in the second quarter of 2024, it added. The annual decline in the segment was at 83 per cent, and the QoQ drop was relatively modest at 41 per cent.
"Private equity investments in Indian real estate have shown remarkable resilience and strength in the first half of the year at USD 3.5 billion, reflecting robust market confidence. With foreign investments leading the charge at a significant 73 per cent share in H1 2024, the sustained momentum is expected to drive positive sentiment for the entire year. Sustained growth in FDI and domestic capital in India Real Estate reciprocates the attractiveness and the positive long-term outlook for infrastructure, construction, and real estate in India. The domestic institutional and retail investor activity in Indian real estate is also expected to remain strong in the second half of the year, driven by healthy economic activity and consumer confidence," said Piyush Gupta, Managing Director, of Capital Markets and Investment Services at Colliers India.
Underscoring the growth in e-commerce and retail consumption, the report added that various asset-level investors are likely to enter the market, boosting the demand for AI-enabled warehouses and micro-fulfilment centres in the upcoming quarters.
