Foreign investors infuse USD 436 Million in India`s Real Estate sector, marking a 139% YOY increase during Q3 2024 (July-Sep) - Vestian
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Institutional investments in the real estate sector witnessed an annual growth of 41% in Q3 2024, reaching USD 0.96 Bn. However, it sharply declined from USD 3.1 Bn record investments received in the previous quarter. Despite this significant quarterly decline of 69%, the outlook remains positive as investment nearly touches a billion mark.
Source: Vestian Research
The significant uptick in investments compared to the previous year is a testament to India’s robust economic growth amid prevailing geopolitical challenges. As a result, the share of foreign investors increased from 27% in Q3 2023 to 46% in Q3 2024. Conversely, the share of domestic investors declined to 43% in Q3 2024 from 71% in the same quarter a year earlier. However, the decrease was only 15% in terms of value.
Shrinivas Rao, FRICS, CEO, Vestian said, “Investors have shown confidence in India’s growth story on the back of robust GDP growth. As a result, the real estate sector witnessed increased participation from foreign investors which led to institutional investments touching a billion mark in Q3 2024. Additionally, domestic investors are also actively participating, supported by the rapid infrastructure development across the country.”
Note: Co-investment refers to joint funding by foreign and domestic investors.
Source: Vestian Research
Residential assets were the first preference for domestic investors during Q3 2024 whereas foreign investors accounted for 64% of the commercial deals. Growing prominence of work-from-office mandates and GCCs (global capability centres) lured foreign investors, leading to an increase in the share of commercial investments from 24% in Q3 2023 to 71% in Q3 2024. On the other hand, the share of residential sector reduced to 19% in Q3 2024 from 44% in the same period a year earlier. However, investment in residential assets is expected to grow in the coming quarters as niche asset classes such as co-living, senior housing, and serviced apartments are gaining traction.
Note: Commercial assets include office, retail, co-working, and hospitality projects.
Source: Vestian Research
Furthermore, Chennai received the highest investments during Q3 2024 with 48% share. Majority of investments in the city were concentrated in industrial & warehousing, commercial, and residential sectors.
Moreover, proptech platforms have also garnered traction with 22% share of total investments recorded during Q3 2024. The share is likely to inflate further with the extensive use of artificial intelligence and machine learning in the real estate sector.
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