The real estate sector recorded equity investments of $8.9 billion (Rs 74,815 crore) in the first nine months of 2024, surpassing the growth of $7.4 billion (Rs 62,210 crore) in 2023, showing a year-on-year growth of 46 per cent, according to a report by CBRE South Asia.
The Indian real estate sector has witnessed a tremendous upswing, rising to its highest level since 2018. The report highlights a sizeable quarterly equity investment of $2.6 billion (Rs 21,857 crore) between July and September 2024. This growth was led by Mumbai, Bengaluru and Chennai, which together accounted for 66 per cent of equity inflows in Q3 2024, subscribing $0.96 billion (Rs 8,070 crore), $0.40 billion (Rs 3,362 crore)and $0.34 billion (Rs 2,858 crore) respectively.
Delhi-NCR, Pune and Hyderabad also recorded a significant share of investments with capital inflows of $0.31 billion (Rs 2,605 crore), $0.27 billion (Rs 2,269 crore) and $0.02 billion (Rs 1,681 crore) respectively.
The increase in investment momentum was primarily driven by domestic investors, particularly construction companies, which accounted for nearly 79 per cent of equity inflows during the July-September quarter. Singapore and the US accounted for 73 per cent and 22 per cent of the total inflows among foreign investments.
Developers accounted for around 47 per cent of the total equity investments, a significant increase during the quarter, followed by institutional and collective investors at around 36 per cent. Anshuman Magazine, Chairman and CEO – India, South East Asia, Middle East and Africa, CBRE told ANI, “Investment activity in the Indian real estate market reached a new high in 9M 2024 on the back of a renewed increase in capital deployment in Q2 2024 (Apr-Jun ’24).”He noted that continued capital inflows are expected in the coming quarters in both the traditional and emerging sectors, with institutional and collective investors as well as developers expected to lead the overall capital movements.
Although 45 per cent of the total investments in Q3 were in land and development, which emerged as the most attractive investment segments. The office sector accounted for 24 per cent of the investments, while the retail sector led the pack with a 22 per cent share of the capital inflows witnessed a revival. 56 per cent of the capital was used for land acquisition for residential development, while the rest was used for retail, data centres, warehousing projects, hospitals and other purposes. The trend towards metros and Tier-I cities is expected to continue, even as opportunities in smaller Tier-II cities are gaining attention, especially after the recent Sebi regulation on small and medium-sized real estate mutual funds.
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