Foreign Investors Infuse $436M in India’s Real Estate Sector: Vestian
Institutional investments in India's real estate sector experienced a 41% year-on-year growth in Q3 2024, reaching USD 0.96 billion. Despite a sharp decline of 69% from the record USD 3.1 billion investment seen in the previous quarter, the sector remains optimistic as investment levels approach the billion-dollar mark.
The notable rise in investments compared to the previous year highlights India's economic resilience amid global geopolitical challenges. Foreign investors significantly increased their presence in the market, with their share rising from 27% in Q3 2023 to 46% in Q3 2024. Meanwhile, the share of domestic investors fell to 43% from 71% in the same quarter of the previous year, though the decrease in investment value was limited to 15%.
Shrinivas Rao, FRICS, CEO of Vestian, commented, “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, leading to institutional investments nearing a billion mark in Q3 2024. Additionally, domestic investors are also actively participating, supported by the rapid infrastructure development across the country.”
While residential assets remained the preferred choice for domestic investors in Q3 2024, foreign investors focused on commercial properties, which accounted for 64% of their deals. The shift towards work-from-office mandates and the growth of Global Capability Centers (GCCs) attracted foreign investments, resulting in an increase in the share of commercial investments from 24% in Q3 2023 to 71% in Q3 2024. Conversely, the share of the residential sector declined to 19% from 44% in the same period last year. However, the residential segment is expected to see growth in the coming quarters, with rising interest in niche asset classes such as co-living, senior housing, and serviced apartments.
