India’s real estate sector witnessed a substantial increase in institutional investments, reaching approximately $1.15 billion during the third quarter of 2024.
As reported by the Money Control, this represents a 45% increase from $793.4 million in the same period last year, according to a report from Colliers India released on October 2, 2024. The surge in investment highlights the robust demand for premium homes and office spaces as investors look to capitalize on post-pandemic growth.
Data from Colliers indicates that the total institutional investments in real estate during the July to September 2024 period amounted to $1,148.7 million, compared to $793.4 million in the previous year. The report details the performance across various segments:
Office Space
The office segment attracted the largest share of investments, totaling $616.3 million. This figure marks a more than seven-fold increase from $79.1 million in the year-ago period, indicating a strong recovery and ongoing interest in high-quality office spaces.
Residential Properties
The residential segment also saw significant growth, with investments increasing by 40% to $384.8 million from $274.6 million a year earlier. This rise can be attributed to heightened demand for quality housing options post-COVID-19.
Industrial and Warehousing
In contrast, the industrial and warehousing segment experienced a dramatic decline in investment, falling 72% to $95.2 million, down from $340.3 million in the same quarter last year. This decrease may reflect changing market dynamics and investor preferences.
Mixed-Use Developments
Investments in mixed-use projects nearly doubled, increasing to $52.4 million from $27.2 million in 2023. This trend indicates a growing interest in developments that integrate residential, commercial, and recreational spaces.
Alternative Assets
The alternative assets category, which encompasses data centers, life sciences, senior housing, holiday homes, student housing, and schools, saw no funding in the latest quarter, compared to $72.2 million in the same period last year.
Colliers reported that domestic investments remained robust, contributing $0.5 billion or 44% of the total inflows during the July-September quarter. This trend underscores ongoing confidence in the Indian real estate market.
Piyush Gupta, Managing Director of Capital Markets & Investment Services at Colliers India, noted that the consistent institutional flows indicate sustained investor confidence. He added that while office assets remain a key focus, the residential and industrial segments are gaining momentum, showcasing diversification in investor portfolios.
Chennai and Mumbai together accounted for approximately 57% of total institutional inflows during Q3 2024, supported by significant acquisitions in the office sector. Multi-city deals represented 30% of total institutional investments in real estate during this period.
Sanju Bhadana, Managing Director of Gurugram-based 4S Developers, emphasized that India’s demographic advantages, strong domestic consumption, favorable policies, and extensive infrastructure development are attracting investments from both domestic and global investors.