New Delhi, 21st October: Institutional investments in the real estate sector witnessed an annual growth of 41% in Q3 2024, reaching USD 0.96 Bn. However, it sharply declined from USD 3.1 Bn record investments received in the previous quarter. Despite this significant quarterly decline of 69%, the outlook remains positive as investment nearly touches a billion mark.
Quarters | Institutional Investments (USD Bn) | Quarterly Change (%) |
Q3 2023 | 0.7 | -57% |
Q4 2023 | 0.8 | 18% |
Q1 2024 | 0.6 | -31% |
Q2 2024 | 3.1 | 464% |
Q3 2024 | 0.96 | -69% |
Source: Vestian Research
The significant uptick in investments compared to the previous year is a testament to India’s robust economic growth amid prevailing geopolitical challenges. 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 declined to 43% in Q3 2024 from 71% in the same quarter a year earlier. However, the decrease was only 15% in terms of value.
Shrinivas Rao, FRICS, CEO, Vestian said, “Investors have shown confidence in India’s growth story on the back of robust GDP growth. As a result, the real estate sector witnessed increased participation from foreign investors which led to institutional investments touching a billion mark in Q3 2024. Additionally, domestic investors are also actively participating, supported by the rapid infrastructure development across the country.”
Investor Type | Institutional Investments (USD Mn) | % Share | % Change | |||||
Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 vs Q2 2024 | Q3 2024 vs Q3 2023 | |
Foreign | 436.5 | 2,218.1 | 182.6 | 46% | 71% | 27% | -80% | 139% |
India-dedicated | 414.6 | 637.9 | 485.2 | 43% | 21% | 71% | -35% | -15% |
Co-investment | 109.8 | 260.2 | 12.1 | 11% | 8% | 2% | -58% | 807% |
Total | 960.8 | 3,116.3 | 679.9 | 100% | 100% | 100% | -69% | 41% |
Note: Co-investment refers to joint funding by foreign and domestic investors.
Source: Vestian Research
Residential assets were the first preference for domestic investors during Q3 2024 whereas foreign investors accounted for 64% of the commercial deals. Growing prominence of work-from-office mandates and GCCs (global capability centres) lured foreign investors, leading to an increase in the share of commercial investments from 24% in Q3 2023 to 71% in Q3 2024. On the other hand, the share of residential sector reduced to 19% in Q3 2024 from 44% in the same period a year earlier. However, investment in residential assets is expected to grow in the coming quarters as niche asset classes such as co-living, senior housing, and serviced apartments are gaining traction.
Asset Type | Institutional Investments (USD Mn) | % Share | % Change | |||||
Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 vs Q2 2024 | Q3 2024 vs Q3 2023 | |
Commercial | 684.5 | 622.3 | 164.1 | 71% | 20% | 24% | 10% | 317% |
Residential | 181.1 | 732.8 | 298.3 | 19% | 24% | 44% | -75% | -39% |
Industrial & Warehousing | 95.2 | 1,500.0 | 190.3 | 10% | 48% | 28% | -94 | -50% |
Diversified | Negligible | 261.2 | 27.2 | NA | 8% | 4% | NA | NA |
Total | 960.8 | 3,116.3 | 679.9 | 100% | 100% | 100% | -69% | 41% |
Note: Commercial assets include office, retail, co-working, and hospitality projects.
Source: Vestian Research
Furthermore, Chennai received the highest investments during Q3 2024 with 48% share. Majority of investments in the city were concentrated in industrial & warehousing, commercial, and residential sectors.
Moreover, proptech platforms have also garnered traction with 22% share of total investments recorded during Q3 2024. The share is likely to inflate further with the extensive use of artificial intelligence and machine learning in the real estate sector.
About Vestian:
Vestian is an occupier-focused workplace solutions firm specializing in commercial, residential, industrial, retail and hospitality sectors. Headquartered at Chicago, Vestian has offices across US, India, China, UK, Sri Lanka and the Middle East. Our core strength lies in providing customized innovative solutions that are aligned to the client's business objectives. Our extensive service portfolio includes Investment & Consultancy Services, Transaction Advisory Services, Project Services, Retail Business Solutions and Integrated Facilities Management Services. Vestian is the only global workplace solutions organization to be certified in both quality management systems and environmental health & safety standards such as ISO 9001, ISO 14001, ISO 45001 and ISO 37001. For further information on the company, you can visit us at www.vestian.com
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