There has been some great news for the Indian real estate industry. Institutional investment in the domestic real estate sector, especially contributions from foreign institutional investors, is heading north. Institutional investment in the real estate sector recorded an annual increase of 41% in Q3 2024, reaching $960 million. However, it was a significant drop from last quarter’s record investment of $3.1 billion. Despite a significant quarter-on-quarter decline of 69%, the outlook remains positive as investments reach almost the billion mark. By any measure, this is a very positive sign. The significant increase in investment compared to the previous year is a testament to the country’s strong economic growth amid the prevailing geopolitical challenges that are disrupting many other economies. As a result, the proportion of foreign investors increased from 27% in Q3 2023 to 46% in Q3 2024. Conversely, the proportion of domestic investors decreased from 71% in the same period last year to 43% in Q3 2024. Previously. However, according to a recent study by Vestian, a resident-focused workplace solutions company specializing in commercial, residential, industrial, retail and hospitality sectors, headquartered in Chicago with offices across the United States, the amount The base decline was only 15%. States, India, China, UK, Sri Lanka, Middle East.
According to a survey by Bestian, investors are expressing confidence in India’s growth story on the back of strong GDP growth. As a result, the real estate sector has seen an increase in the participation of foreign investors, with institutional investments reaching $1 billion in the third quarter of 2024. Additionally, domestic investors are also actively participating, supported by the country’s rapid infrastructure development. Interestingly, residential assets were the top priority for domestic investors in Q3 2024, while foreign investors accounted for 64% of commercial transactions. Mandatory office working and increased visibility of GCCs (Global Capability Centers) have attracted countless foreign investors, increasing the share of commercial investment from 24% in Q3 2023 to Q3 2024. This increased to 71%. Meanwhile, the share of the residential sector decreased from 44% in the same period last year to 19% in the third quarter of 2024.
Despite this scenario, investments in residential assets are expected to increase in the coming quarters, with niche asset classes such as co-living, senior housing, and serviced apartments gaining traction. Moreover, when it comes to cities, Chennai received the most investments in Q3 2024 with a huge share of 48%. The majority of investment in the city was concentrated in the industrial, warehousing, commercial, and residential sectors. In addition, proptech platforms also gained traction, accounting for 22 percent of the total investments recorded in Q3 2024. This share is expected to grow further due to the widespread use of artificial intelligence and machine learning in the real estate sector. This momentum should continue.
