New Research: Asia Pacific Dominates Global Cross-Border Capital
An in-depth study conducted by Colliers has revealed that the Asia Pacific (APAC) region continues to play a significant role in global cross-border capital. The report highlights four APAC countries that made it to the global top ten list for capital sources in the first half of 2024. These countries are Singapore, Hong Kong, Japan, and China.
In terms of global capital targeting standing assets, both Japan and China secured a spot in the top five destinations worldwide. The APAC region further showcased its prominence, with Australia also earning its place within the top ten, according to Colliers’ Global Capital Flows Report | H1 2024.
India Shines as a Global Cross-Border Capital Destination for Land and Development Sites
One noteworthy highlight is India’s remarkable ranking of third place on the global list as a cross-border capital destination for land and development sites. This showcases India’s attractiveness for investment in the real estate sector.
Office Sector Leads Investment Activity in APAC
The office sector emerged as the most sought-after segment in terms of investment activity in the APAC region during the first half of 2024. Following closely behind was the industrial sector. India’s real estate market mirrored this trend, as investments in industrial and warehousing assets remained robust in the first six months of the year. Compared to the same period last year, there was a remarkable increase of 5X in investments in industrial assets.
The Growing Foreign Investment in India’s Industrial and Warehousing Sector
A significant observation from the report is the surging foreign investment inflows into India’s industrial and warehousing sector. In the first half of 2024, nearly 70% of the total foreign investments in India’s real estate sector were directed towards industrial and warehousing assets. This trend is driven by the rising demand from third-party logistics (3PL) and e-commerce players, as well as the strengthening of manufacturing capabilities across key industrial corridors within the country. It highlights the increasing appeal of India as a preferred destination for industrial investments, reaffirming long-term confidence in this sector.
“Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India, stated, ‘Foreign investment in India’s industrial & warehousing sector has been gaining significant traction in recent times. In H1 2024, nearly 70% of the total foreign inflows in India’s real estate sector were directed towards industrial & warehousing assets. Investor affinity is being driven by rising demand from 3PL & E-commerce players and strengthening of manufacturing capabilities across key industrial corridors of the country. In fact, the growing appeal of India as a key destination for industrial investments reinforces long-term confidence in the sector.'”
Institutional Investor Interest in Indian Real Estate Remains Strong
The report highlights that institutional investor interest in the Indian real estate market remained firm, with a total inflow of USD 3.5 billion in H1 2024. Notably, 70% of the investments during this period were focused on ready assets. However, India’s rapid growth and infrastructure development will continue to present numerous opportunities for developmental assets in the coming years.
Vimal Nadar, Senior Director and Head of Research at Colliers India, expressed optimism, stating, “Backed by robust domestic demand, healthy GDP growth, and likely easing of monetary policy in the next few quarters, investments in the Indian real estate sector will remain steady. Evident from a 73% share during H1 2024, foreign inflows will continue to dominate institutional investments in the near-term. Although North America and EMEA will lead the foreign inflow of funds, we can witness increasing traction from investors in the wider APAC region.”
APAC Offers Diverse Investment Opportunities
Chris Pilgrim, Colliers’ Managing Director of Global Capital Markets, Asia Pacific, highlighted that APAC has emerged as a powerhouse of economic activity, providing diverse investment opportunities across various sectors. These range from traditional residential, commercial, and industrial segments to rapidly growing specialized sectors such as data centers and cold storage. With improving fundamentals and global rate cuts signaling positivity for real estate markets, new investment prospects are set to arise in the months ahead.
In summary, the Asia Pacific region, led by strong performers such as Singapore, Hong Kong, Japan, and China, continues to captivate global Cross-Border Capital flows. India has emerged as a significant player in the industrial and warehousing sector, attracting foreign investment to cater to rising demand. With India witnessing robust domestic demand and positive economic indicators, it remains an attractive destination for institutional investors. The future of the APAC real estate market looks promising, with diverse opportunities across multiple sectors available for potential investors.
