Foreign investors infuse over half of realty capital at $0.5bn in Q1
These investors gave funds to the tune of $3.6 bn in India’s real estate during 2023
image for illustrative purpose
Foreign investors continue to exhibit confidence in India’s real estate sector, infusing $3.6 billion in 2023, driving 67 per cent of the total inflows. The momentum continued in Q1 2024 (January-March 2024), with foreign investors driving over 55 per cent of the investment inflows at $0.5 billion, said Colliers India report.
Institutional investors are largely drawn to completed and pre-leased income-yielding assets in India due to their ability to provide immediate and steady returns, low risk profile, compliance assurance, and lesser exit-related hassles, an official release from the investment management company said, adding that, sustained preference for ready assets is evident from the 73 per cent investment inflows in such assets during Q1 of this year.
According to a new report from Colliers, four of the top five global cross-border capital destinations for land and development site investments in the first quarter of 2024 were in Asia Pacific. The report, Asia Pacific Global Capital Flows May 2024, listed China, Singapore, Australia and India, for cross-border capital investment in land/development sites in the first quarter of 2024.
The Colliers report further said that with majority of the large Grade A projects being already funded, investors are forging partnerships with local developers and investors, in developmental assets spanning across office, residential and industrial segments. “India presents opportunities for investment in developmental sites as the real estate sector is set to reach $1 trillion by 2030, accounting for 13 to 15 per cent of India’s GDP. The Capital in Indian real estate is getting more diversified to sectors such as Residential, Logistics, Alternatives, Credit,” said Piyush Gupta, Managing Director - Investment Services, Colliers India.
The real estate growth is likely to extend beyond the top six cities, covering multiple smaller cities across the country, backed by infrastructure advancements, increased digital penetration, and supportive regulatory framework in these cities, the report added. “Institutional investments in residential segment have witnessed a 20 per cent YoY rise during 2023, at $0.8 billion. With robust residential sales momentum across cities, this trend is expected to continue, making it an opportune moment to capitalise on greenfield development opportunities, especially in residential real estate,” said Vimal Nadar, Senior Director,Colliers India.
