Real Estate Equity Investments Surge by 46% to Reach $8.9 Billion in First Nine Months of 2024
Mumbai, Bengaluru, and Chennai collectively accounted for 66% of real estate investments in Q3 2024, according to CBRE’s 'India Market Monitor Q3 2024 - Investments' report.
Real Estate InvestmentsEquity InvestmentsCbreIndia Market MonitorProperty MarketReal Estate NewsOct 14, 2024
Equity investments in this sector encompass a wide range of sources, including private equity funds, pension funds, sovereign wealth funds, institutional investors, real estate developers, real estate fund-cum-developers, investment banks, corporate groups, and REITs. The robust growth in real estate equity investments is a testament to the sector's continued attractiveness to investors.
On a quarterly basis, equity investments in real estate stood at $2.6 billion in the July-September 2024 period. Domestic investors, primarily developers, accounted for around 79% of equity capital inflows during this quarter. Singapore-based investors led the foreign capital inflows, contributing nearly 73%, followed by the United States with approximately 22%.
Developer activity saw a notable uptick in the July-September 2024 quarter, representing nearly 47% of total equity investments. Institutional and collective vehicle investors followed with about 36% of the total investments. Mumbai, Bengaluru, and Chennai collectively dominated the equity investment landscape, capturing more than 66% of the total investments during this period.
Land and development sites were the most favored investment categories, accounting for 45% of the total investments. The office sector followed with a 24% share, while the retail sector experienced a resurgence, capturing around 22% of the capital inflows. Approximately 56% of the total capital inflows in land and development sites were allocated to residential projects, with the remainder dedicated to retail, data centers, warehousing, and hospitals.
In addition to the $2.6 billion in capital infusion, investment and development platforms worth around $235 million were established during the quarter, primarily in the hotel and residential sectors. The report suggests that investment activity in India’s real estate market reached a new peak in the first nine months of 2024, driven by a resurgence in capital deployment in the second quarter of 2024 (April-June 2024).
Anshuman Magazine, Chairman and CEO of CBRE for India, South-East Asia, Middle East, and Africa, commented, 'Investment activity in India’s real estate market has scaled new heights in the first nine months of 2024. We anticipate sustained capital inflows in both traditional and emerging sectors in the upcoming quarters, with institutional and collective vehicle investors, along with developers, expected to drive the overall capital flows.'
CBRE, a leading global real estate services firm, provides comprehensive market insights and strategic advice to investors and developers. Their reports and analyses are instrumental in shaping the real estate landscape in India and beyond. Investors are likely to continue directing equity inflows towards metros and tier-I cities. However, SEBI’s SM REIT regulations also highlight the potential for investment in quality assets in tier-II locations.
Frequently Asked Questions
What is the total equity investment in the real estate sector for Jan-Sep 2024?
The total equity investment in the real estate sector for Jan-Sep 2024 reached $8.9 billion.
Which cities accounted for the majority of real estate investments in Q3 2024?
Mumbai, Bengaluru, and Chennai collectively accounted for 66% of the total real estate investments in Q3 2024.
What percentage of equity investments came from domestic investors in Q3 2024?
Domestic investors, primarily developers, accounted for around 79% of the equity capital inflows in Q3 2024.
Which investment category dominated in Q3 2024?
Land and development sites dominated with a 45% share of the total investments in Q3 2024.
What is the expected trend in real estate investments in the upcoming quarters?
Sustained capital inflows are expected in both traditional and emerging sectors, with institutional and collective vehicle investors, along with developers, driving the overall capital flows.
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