Record Institutional Investments in Real Estate

Buoyed by the surging economy riding high on robust infrastructure development, real estate has seen a significant upsurge in institutional investments driven by foreign investors.

The second quarter of 2024 witnessed institutional investments of USD 3.1 billion, registering a sharp increase of 96 percent over the same quarter a year ago and 464 percentover the previous quarter. As the world economy is stabilizing amid geopolitical challenges, investors actively participated, resulting in the highest institutional investments in a quarter post the pandemic.

Source: Vestian Research

Foreign investors accounted for the highest share, 71 percent , of the total investments received during the second quarter of 2024 as they flocked to India to capitalize on its robust economic growth. On the other hand, domestic investors accounted for around 20 share share of the total investments in Q2 2024, which has declined significantly from 98 percent a quarter earlier. However, investments in value terms have increased by 18 percent  over the previous quarter.

Note: Co-investment refers to joint funding by foreign and domestic investors.

Source: Vestian Research

“Indian real estate sector garnered significant investments in the second quarter of 2024, dominated by foreign investors as the looming uncertainty over the major economies of the world has faded away. Moreover, domestic investors have also actively participated to capitalize on the robust economic growth, says Shrinivas Rao, CEO, Vestian.”

Industrial & Warehousing sector reported a single large deal worth USD 1.5 billion, accounting for 48 percent of the total investments received in Q2 2024. The deal concluded between Abu Dhabi Investment Authority (ADIA), KKR, and Reliance Retail Ventures Limited (RRVL). Residential and commercial (office, retail, co-working, and hospitality projects) assets followed with 24 percent  and 20 percent  share, respectively.

A yearly decline of 56 percent during Q2 2024 in commercial investments (in value terms) was due to the conclusion of a major deal between GIC and Brookfield during Q2 2023.

Note: Commercial assets include office, retail, co-working, and hospitality projects.

Source: Vestian Research

Multi-city deals accounted for 61 percent of the total investments reported in Q2 2024, followed by Mumbai and Hyderabad with 13 percent  and 12 percent  respectively. KKR, ADIA, GIC, Xander, Blackstone, Mitsui, Nisus Finance, SWAMIH Fund, and HDFC Capital were some of the more prominent investors during the current quarter.

Investments, according to Rao , are anticipated to increase in the upcoming quarters on the back of robust economic growth and infrastructure development.