Foreign investors poured $3.5 bn into India’s real estate in H1 2024

Mumbai: India's real estate sector attracted $3.5 billion from foreign institutional investors during the first half of 2024, making it the third most preferred global destination for land and development site investments, according to a report by investment management company Colliers.

Foreign investment drove 73% of the total investments in India’s real estate market, with cross-border investments reaching over $1.5 billion. The APAC region contributed over $1.2 billion in inflows, according to the ‘Global Capital Flows Report’. 

The real estate market saw $995.1 million in foreign investments in the first quarter of the calendar year, while the second quarter saw $2.5 billion. 

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Nearly 70% of investments during the first half of the year were focused on ready assets. According to the report, India’s fast-paced growth and infrastructure development are also likely to offer more opportunities in the developmental assets space over the coming years.

Industrial and warehousing sectors were the most active during this period. Investments in industrial assets were up nearly fivefold compared to the same period last year.  

“Investor affinity is being driven by rising demand from the third-party logistics and E-commerce players and strengthening of manufacturing capabilities across key industrial corridors of the country,” said Piyush Gupta, managing director, Capital Markets & Investment Services at Colliers India. 

Mint reported earlier that several new funds, such as Mubadla, Mitsubishi Fudson, PAG Credit & Markets, Cadillac Fairview, Korea Investment Corp, and PNB Malaysia, have been actively exploring India's real estate market. The funds are either expanding their investments or establishing fresh collaborations. 

India’s luxury space is another segment that is experiencing a boom, with an expected CAGR of over 5% during 2023-2028. Non-resident Indians or NRIs are increasingly investing in India's luxury real estate, injecting $13.1 billion into the market in the previous year. By 2025, NRIs are expected to account for 20% of the country's total real estate investments, Mint reported earlier. 

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In APAC, however, transaction volumes have declined throughout 2024. While Q1 was actively in line with the previous year, the second quarter saw a 29% drop in volumes compared to 2023 levels. This is primarily due to a 30% decline in land and development site transactions across APAC, with sales in China falling 40% year-on-year.