Foreign Investment In India's Real Estate Accounts For 65% Total In First Half Of 2024

Foreign investors have taken the lead in India's real estate sector during the first half of 2024, accounting for 65 per cent of total investments, according to a report by JLL.

The report highlighted that Foreign Institutional Investors (FIIs) injected around USD 3.1 billion, contributing significantly to the sector's total investment of USD 4.8 billion in the first six months of 2024.

The report noted that the investment in the real estate sector during the first 6 months of the year has already covered around 81 per cent of total investment in 2023. It highlights the confidence of investors in India amidst global uncertainties and the election season, exemplifying the country's robust economy.

While real estate investments declined slightly in the first quarter of 2024 compared to the previous year, the report noted that the overall first half of 2024 recorded nearly double the number of deals, with an average deal size of USD 113 million.

The share of domestic investors dropped to 35 per cent in the first half of 2024 from 37 per cent in 2023. The average share of domestic investors in the last five years is 19 per cent.

“India has once again demonstrated its impressive resilience in the face of global economic challenges, attracting substantial institutional investments totalling USD 4.8 billion in the first half of 2024. This is a remarkable 62 per cent increase compared to the same period in 2023, showing investors' unwavering confidence in the growth potential of the Indian real estate market,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL

The residential sector achieved an all-time high half-year investment of USD 1.6 billion and the report attributed it to the regulatory reforms and improved transparency in the segment in the last five to seven years. Investment towards this sector primarily weighed towards debt with 68 per cent of the deals being structured debt.

The report also noted that the office sector, which was historically the favoured investment asset class among institutional investors, saw a decline in investments in the first half of 2024 compared to the previous year. The warehousing sector leads at 34 per cent share of investments followed closely by residential at 33 per cent share.

However, the report noted that the warehousing sector's investment surge was primarily driven by a single deal which accounted for over 92 per cent of the total transaction volume in the warehousing sector.

Although the growth was not broad-based, it highlights the increasing interest in the warehousing sector and the potential it holds for investments in India.

Noting the outlook for the upcoming half of 2024, the report stated that India's economy continues to exhibit resilience and a positive outlook for the real estate sector, attracting investors interested in the country's growth story. The private equity investment outlook remains strong, with a diversification of interest across residential, office, warehousing, and other sectors. (ANI)