Realty sector (Image for representation).
Credit: PTI Photo
Bengaluru: Institutional investment inflows in Indian realty touched $1.1 billion during July to September (Q3) 2024, said professional services and investment management company Colliers on Wednesday. This is up 45 per cent over Q3 2023.
During the first three quarters of 2024, institutional investments into the real estate sector reached $4.7 billion, almost at par with the corresponding period in 2023.
The office segment accounted for 54 per cent of the total investments during the quarter, followed by residential with a 33 per cent share. Residential inflows were particularly driven by domestic capital.
Overall, domestic investments accounted for 44 per cent of the total investments during the quarter at $500 million.
At $600 million inflows in Q3 2024, foreign investments have more than doubled compared to the investments witnessed in Q3 2023.
After witnessing subdued activity in the previous quarter, investments in the office segment doubled on a quarter-on-quarter (QoQ) basis, at $600 million inflows. Investments rose by 6.8 times as compared to the same period last year.
Foreign investments accounted for 88 per cent of the total inflows into the segment during Q3 2024.
At the same time, the office segment saw a 48 per cent YoY decline for year-to-date (YTD) 2024 versus YTD 2023.
“While office assets remain a key focus, industrial and warehousing and residential segments are gaining significant momentum. The newer emerging themes like fractional ownership in office and warehousing, residential platforms with developers, flexible credit, and hospitality are driving opportunities for investors. Of the total $4.7 billion institutional inflows during the first nine months of 2024, over 60 per cent were directed towards industrial and warehousing and residential assets,” said Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India.
Residential assets saw $400 million inflows during the quarter, witnessing a substantial surge of 40 per cent on a year-on-year (YoY) basis. This accounted for one-third of the total investments in the quarter.
On this, Vimal Nadar, Senior Director and Head of Research, Colliers India, explained, "Most of these investments were directed towards developmental assets, as institutional investors continue to partner with reputed developers in marquee residential projects. With a conducive domestic environment, ongoing festive season and a much-anticipated reduction in interest rates, investor confidence in India's residential real estate market is poised to remain intact."
Chennai and Mumbai together accounted for about 57 per cent of the total inflows during Q3 2024 backed by key acquisitions in the office segment. Almost 70 per cent of the inflows in Chennai during the quarter were driven by foreign investments. Mumbai and Delhi NCR cumulatively witnessed about 44% of the total quarterly investments in the residential segment.
Multi-city investments corresponded to 30 per cent of the overall inflows during Q3 2024 and were predominantly directed towards office and residential asset classes. However, this was down by 28 per cent since Q3 2023.