Real Estate Investments in India Soar to New Heights in Q2 2024
In a promising development for the Indian real estate market, investments during the second quarter of 2024 reached an impressive $2.77 billion, according to Cushman & Wakefield’s latest Capital Market Beat report. This substantial influx has propelled the total investments for the first half of the year to reach a record-breaking $3.9 billion, showcasing the resilience and allure of the market. The report also highlights a remarkable 1.5x increase in investment compared to the previous quarter and a significant year-on-year growth of 39%, reinforcing the sustained confidence of investors.
Delhi-NCR Leads the Way in Private Equity Investments
Among the various cities reigning supreme in attracting private equity investments in Q2, Delhi-NCR held the top spot, with a substantial inflow of $532 million, representing 19% of the total investment share. This showcases a noteworthy year-on-year growth of 74% and asserts Delhi-NCR’s dominance in consolidating investor interest. Additionally, Delhi-NCR continued its lead in the first half of 2024, securing around $633 million of inflows, which amounts to a 16% share in the record-breaking $3.9 billion worth of investments this sector has witnessed. The burgeoning investments in Delhi can mainly be attributed to the office segment, where esteemed fund houses carried out significant equity buyouts. Moreover, the residential sector in the city has continued to generate substantial interest, particularly among the high-end and luxury segments.
Following Delhi-NCR, Bengaluru secured a notable 13% share in investments with $509 million, closely trailed by Hyderabad with an 8% share and an infusion of $320 million. Notably, multi-city deals played a substantial role, accounting for the remaining 48% of investments, amounting to $1,862 million. These investments reflect a strategic and diversified approach, presented across varied regions.
High Inflows in Logistics and Industrial Sectors
Reflecting the current investment landscape, the Logistics and Industrial sectors have emerged as dominant players, acquiring 56% of the total investments, equating to approximately $1.54 billion. These sectors have also maintained their leading position in the broader first half (H1) of 2024, capturing a hefty 41% of the total inflows, totaling roughly $1.6 billion. The office sector followed closely, amassing $924 million in Q2 and $1,196 million in H1. Additionally, the residential sector secured the third position, witnessing a considerable infusion of $309 million in Q2 and $1,002 million in H1.
Foreign Investors Drive Growth in the Real Estate Sector
Foreign investors made a significant contribution, accounting for approximately 76.3% of the total investment volume in Q2 2024. A substantial portion of these investments was directed towards the Logistics and Industrial sector, with international investors recognizing its immense potential. The report further indicates that deals involving a combination of equity and structured debt constituted 62% of the total inflows, while pure equity infusion deals made up the remaining 25%.
On a macroeconomic front, it is noteworthy that the manufacturing sector exhibited significant growth of 9.9% year-on-year, while the tertiary sector witnessed a growth rate of 7.6% annually. The rise in GST collections for June 2024 is also an indicator of robust domestic transaction volumes, displaying a noteworthy 8% year-on-year increase.
Underlining the positive sentiment and overall outlook, Somy Thomas, Managing Director of Valuation & Advisory and Capital Markets at Cushman & Wakefield, emphasized that the infusion of $3.9 billion in private equity inflows during the first half of 2024 showcases remarkable growth and highlights investor confidence in India’s real estate market. Thomas acknowledged the pivotal role played by infrastructure-related sectors such as logistics and industrial, bolstered by substantial public investments in multi-modal economic corridors. He further emphasized the strong demand for office and residential spaces, aligning with the market’s growing appeal. Given this continued positive momentum, a buoyant year for private equity investments in the commercial real estate sector is anticipated, thereby potentially surpassing initial expectations.
It is evident that the Indian real estate market has showcased remarkable resilience and remains an attractive destination for both domestic and international investors. With the favorable investment climate, sustained growth of various sectors, and positive market sentiment, the Indian real estate market holds significant promise for the foreseeable future.
