Real Estate Sector Records the Highest-Ever Equity Investment Since 2018

New Delhi / October 14, 2024: CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, announced the findings of its report, ‘India Market Monitor Q3 2024 – Investments’. The report indicates a robust 46% Y-o-Y growth in real estate equity investments, totalling $8.9 billion in Jan-Sep 2024 —the highest-ever recorded since CY 2018, surpassing the $7.4 billion total equity investments for CY 2023. On a quarterly basis, equity investments in real estate stood at $2.6 billion in the Jul-Sep 2024 period, CBRE South Asia said in a statement. 

Domestic investors (predominantly developers) took the lead with 79% share in equity capital inflows in Jul-Sep 2024. Singapore-based investors accounted for nearly 73% of the total foreign capital inflows, followed by the United States (22%). Developer activity picked pace in Jul- Sep 2024 quarter, accounting for a share of nearly 47% in total equity investments, followed by institutional & collective vehicle investors (36%), the statement added.

Mumbai led the equity investment activity in Jul-Sep 2024, along with Bengaluru and Chennai. Together, these three cities accounted for over 66% 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, the statement added. 

During Jul-Sep 2024, land/development sites dominated investments with a share of 45%, followed by the office sector with a 24% share. The retail sector experienced a resurgence in capital inflows, capturing a 22% share in the same quarter. About 56% 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 $2.6 billion in Jul-Sep 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 (Apr-Jun 2024). 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 disposable 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.”