Real Estate Sector Sees Record Equity Investments in 2024: CBRE Report
New Delhi [India], October 14: Equity investments in India's real estate sector have reached a record high of USD 8.9 billion in the first nine months of 2024, marking a significant 46% year-on-year growth, according to a CBRE South Asia report.
Real EstateEquity InvestmentsCbreIndiaProperty MarketReal EstateOct 14, 2024
The report highlights a substantial quarterly equity investment of USD 2.6 billion during July-September 2024. Leading the charge were Mumbai, Bengaluru, and Chennai, which collectively accounted for 66% of the equity inflows in Q3 2024, drawing USD 0.96 billion, USD 0.40 billion, and USD 0.34 billion, respectively. Delhi-NCR, Pune, and Hyderabad also saw significant investment activity, with capital inflows of USD 0.31 billion, USD 0.27 billion, and USD 0.02 billion, respectively.
The increased investment momentum was largely driven by domestic investors, primarily developers, who contributed nearly 79% of the equity capital inflows during the July-September quarter. Among foreign investors, Singapore accounted for approximately 73% of the total inflows, followed by the United States at 22%.
Developers' activity saw a significant uptick during the quarter, with developers representing nearly 47% of the total equity investments, followed by institutional and collective vehicle investors at approximately 36%.
Anshuman Magazine, Chairman and CEO of CBRE India, South-East Asia, Middle East & Africa, stated, 'Investment activity in India’s real estate market has scaled a new peak in the first nine months of 2024, following a resurgence in capital deployment in Q2 2024 (Apr-Jun '24). Sustained capital inflows are expected 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.'
Land and development sites emerged as the most attractive investment segments, accounting for 45% of the total investments during Q3 2024. The office sector attracted 24% of the investments, while the retail sector saw a resurgence with a 22% share of the capital inflows. Within the land acquisitions, approximately 56% of the capital was directed towards residential developments, while the remainder was committed to retail, data centres, warehousing projects, hospitals, and other uses.
Additionally, investment and development platforms worth approximately USD 235 million were established in the hotels and residential sectors during the July-September quarter, further underscoring the sector’s growth trajectory.
The trend towards metro and Tier-I cities is expected to persist, although opportunities in smaller Tier-II locations are also gaining attention, especially following SEBI’s recent regulations on small and mid-sized real estate investment trusts (SM REITs).
CBRE South Asia is a leading real estate service company with expertise in commercial, residential, and industrial property management, providing comprehensive solutions to clients across the region. Their insights and reports are widely recognized for their accuracy and depth, making them a trusted source for real estate market trends and analysis.
Frequently Asked Questions
What is the total equity investment in India's real estate sector for the first nine months of 2024?
The total equity investment in India's real estate sector for the first nine months of 2024 reached a record high of USD 8.9 billion.
Which cities saw the highest equity inflows in the real estate sector during Q3 2024?
Mumbai, Bengaluru, and Chennai collectively accounted for 66% of the equity inflows in Q3 2024, drawing USD 0.96 billion, USD 0.40 billion, and USD 0.34 billion, respectively.
Who are the primary drivers of equity capital inflows in the Indian real estate sector during Q3 2024?
Domestic investors, primarily developers, contributed nearly 79% of the equity capital inflows during the July-September quarter.
What sectors attracted the most investments in Q3 2024?
Land and development sites accounted for 45% of the total investments, followed by the office sector (24%) and the retail sector (22%).
What is the significance of SEBI’s recent regulations on small and mid-sized real estate investment trusts (SM REITs)?
SEBI’s regulations on SM REITs are expected to provide more opportunities in smaller Tier-II locations, thereby diversifying investment in the real estate sector.
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