Real Estate Sector Records the Highest-Ever $8.9bn Equity Investment Since 2018
Total equity investment during Jan-Sep ’24 touches $8.9bn, up by 46 per cent Y-o-Y basis. Mumbai, Bengaluru, and Chennai accounted for a 66 per cent share of investments during July-September 2024
CBRE findings on Equity investment in Real Estate sector
Hyderabad: The real estate equity investments recorded a robust 46 per cent Y-o-Y growth, totalling $8.9 billion during January-September 2024. This is the highest-ever recorded since CY2018, surpassing the $7.4 billion total equity investments for CY2023. On a quarterly basis, equity investments in real estate stood at $2.6billion in the July-September 2024 period, according to a report titled ‘India Market Monitor Q3 2024 - Investments’ by CBRE South Asia Pvt. Ltd., a leading real estate consulting firm. The report indicates.
Domestic investors (predominantely developers) took the lead with ~79 per cent share in equity capital inflows in January-September 2024. Singapore-based investors accounted for nearly 73 per cent of the total foreign capital inflows, followed by the United States (~22 per cent). Developer activity picked pace in January-September 2024 quarter, accounting for a share of nearly 47 per cent in total equity investments, followed by institutional & collective vehicle investors (~36 per cent).
Mumbai led the equity investment activity during January-September 2024, along with Bengaluru and Chennai. Together, these three cities accounted for over 66 per cent of total investments during this period. Investors are expected to continue directing equity inflows towards metros and tier-I cities. However, SEBI’s SM REIT regulations also highlight investment opportunities in quality (but smaller) assets in tier-II locations.
During January-September 2024, land/development sites dominated investments with a share of 45 per cent, followed by the office sector with a 24 per cent share. The retail sector experienced a resurgence in capital inflows, capturing a ~22 per cent share in the same quarter. About 56 per cent of the total capital inflows in site/land acquisitions were deployed for residential developments, while the remaining was committed towards the development of retail, data centres, warehousing projects, hospitals, etc.
In addition to the capital infusion of $2.6billion during July-September 2024, investment, and development platforms worth ~$ 235 million were set up during the quarter across the hotels and residential sectors.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “Investment activity in India’s real estate market scaled a new peak in 9M 2024, on the back of a resurgence in capital deployment in Q2 2024 (April-June). Sustained capital inflows are expected in both traditional and emerging sectors in the upcoming quarters, while institutional and collective vehicle investors, along with developers, are expected to drive the overall capital flows”.
Gaurav Kumar, Managing Director, Capital Markets and Land, CBRE India, said, “A rebound in the office leasing market, strong disposal incomes and an unprecedented risk appetite for consumer spending and home buying has led to a record flow of investments in the first 9 months of 2024. As India’s demographic profile continues to pay rich dividends and an affordable talent pool keeps adding at a fast pace, we expect sustainable and rapid growth in India’s residential, retail, office, and logistics sectors.”
