According to a report released by real estate consulting firm Bestian on October 21, institutional investment in India’s real estate sector rose 41% year-on-year to $960 million in the July-September period of 2024. . However, it has fallen significantly from its all-time high of $3.1. Investments received last quarter totaled $1 billion.
Institutional investment in real estate reached $960 million from July to September, an increase of 41% year-on-year (representative photo) (Pixabay)
Despite the steep 69% quarter-on-quarter decline, the consultant said the outlook remains positive.
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The increase in investment compared to the previous year is evidence of India’s strong economic growth despite prevailing geopolitical challenges, the report said. 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 decreased from 71% in the same period last year to 43% in Q3 2024. However, in terms of value, the decrease was only 15%, the report said.
said Shrinivas Rao, CEO of FRICS at Vestian. “Investors are expressing confidence in India’s growth story on the back of solid GDP growth.As a result, the real estate sector will see increased participation from foreign investors, with institutional investment expected to increase in Q3 2024. In addition, domestic investors are also actively participating, supported by the country’s rapid infrastructure development.
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Commercial investment increases due to mandatory office work and GCC
According to the report, residential assets were the top priority for domestic investors in the third quarter of 2024, while foreign investors accounted for 64% of commercial transactions. On the other hand, mandatory office work and the increasing attention of GCC (Global Capability Centers) are attracting foreign investors, and the share of commercial investment will increase from 24% in Q3 2023 to Q3 2024. This increased to 71%.
At the same time, the report said the housing sector’s share declined to 19% in the third quarter of 2024 from 44% in the same period last year. However, niche asset classes such as co-living, senior housing and serviced apartments are gaining traction, and investment in residential assets is expected to increase in the coming quarters, the report notes.
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Further, Chennai received the most investments in Q3 2024 with a share of 48%, the report said. The report added that most of the investments in the city are concentrated in the industrial, warehousing, commercial and residential sectors.
Finally, proptech platforms also gained attention, accounting for a 22% share of total investments recorded in Q3 2024. This share is likely to grow further due to the widespread use of artificial intelligence and machine learning in the real estate sector, the report said.
