Equity investments in real estate sector increase by 46% to touch $8.9 billion in January-September 2024

Equity investments include those by private equity funds, pension funds, sovereign wealth funds, institutional investors, real estate developers, real estate fund-cum-developers, investment banks, corporate groups, and REITs, among others.

The report indicates a robust 46% Y-o-Y growth in real estate equity investments, totalling $ 8.9 billion in Jan-Sep ’24 —the highest-ever recorded since CY 2018, surpassing the $7.4 billion total equity investments for CY 2023, it noted.

On a quarterly basis, equity investments in real estate stood at $2.6 bn in the Jul-Sep’24 period.

Domestic investors (predominately developers) took the lead with around 79% share in equity capital inflows in Jul-Sep ‘24. Singapore-based investors accounted for nearly 73% of the total foreign capital inflows, followed by the United States (~22%), it said.

Developer activity picked pace in Jul- Sep ’24 quarter, accounting for a share of nearly 47% in total equity investments, followed by institutional and collective vehicle investors (~36%), it noted.

Also Read: Private equity investments in realty sector hits $2.2 bn in July to Sep period led by industrial and logistics sector

Mumbai led the equity investment activity in Jul-Sep ‘24, along with Bengaluru and Chennai. Together, these three cities accounted for over 66% of total investments during this period, the report noted.

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, it said.

Land/development sites dominated investments with a share of 45%

During Jul-Sept’24, 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 around 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, it said.

Also Read: Institutional investment inflows into the real estate sector touch $1.1 bn in Q3 2024, up 45%: Colliers

In addition to the capital infusion of $2.6 billion in Jul-Sep ’24, investment, and development platforms worth around $235 million were set up during the quarter across the hotels and residential sectors, it said.

Also Read: Office leasing up 56% YoY at 16.4 mn sq ft in Bengaluru between Jan-Sep: Report

“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 ’24). 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,” said Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE.