by THO
Equity investments in Indian real estate may surpass $10 billion in 2024 on the back of strong inflows into built-up office space assets and a robust land acquisition pipeline for residential projects, according to a report by industry body CII and real estate consultant CBRE.
The CII Realty 2024 conclave was inaugurated by D Thara, additional secretary, ministry of housing and urban affairs along with Anil Saraf, chairman, CII Northern Region Committee on real estate and Ashwinder Singh, co-chairman of the same committee.
“Overall equity investments in 2024 in the real estate sector are set to hit a new record surpassing $10 billion for the first time,” the report said.
Equity capital inflows touched $8.9 billion between January and September, registering a 46% Y-o-Y growth. The strong momentum in deal volume continued, with about 200 deals reported during this period, compared to 151 deals in the same period last year, said a report released by CII and real estate consultant CBRE titled ‘Leading the Charge: Crafting the Skylines of Tomorrow’ at the annual CII Realty 2024 conclave.
Average deal size increased to nearly $45 million in the first nine months of 2024
The average deal size also increased to nearly $45 million in the first nine months of 2024 from about $36 million in 2023. Mid-sized deals, ranging between $10-50 million, represented 56% of the total investment inflows during this period.
Delhi-NCR, Mumbai, Bengaluru remain the preferred markets
Gateway cities such as Delhi-NCR, Mumbai, and Bengaluru remained the preferred markets with a cumulative share of over 63% in investment inflows in January-September 2024.
Delhi-NCR witnessed the highest share of around 26% in capital inflows (amounting to $2.3 billion). Equity capital inflows into tier-II and III cities also reached nearly $0.6 billion, with Ludhiana, Mohali, Tuticorin, Hubli, Coimbatore, and Indore collectively accounting for almost 76% of these inflows, the report showed.
Domestic investors invested nearly $6 billion
Domestic investors (predominantly developers) invested nearly $6 billion during the first nine months of the calendar year, dominating the overall capital inflows with an almost 65% share. In comparison, foreign investors contributed about $3.1 billion during the same timeframe. Notably, North American and Singaporean investors were the significant contributors, representing approximately 85% of all foreign capital inflows, it said.
This year, institutional and collective vehicle investors continued to be a major source of capital deployment in the Indian real estate sector, accounting for nearly 40% of the overall investments from January to September 2024. Developer companies led the total capital inflows with more than 41% share in this period.
Office sector saw resurge of inflows in the first nine months with almost 50% growth
The office sector witnessed a resurgence of inflows during January-September 2024, with a nearly 50% Y-o-Y growth. Land/development sites and the office sector cumulatively attracted more than 70% of the investment flows during this period.
Residential, retail, and mixed-use sectors also experienced a significant rebound in capital inflows, capturing a healthy share of the overall capital inflows in the first nine months of 2024, the report noted.
Nearly 64% of the capital inflows in the land/development sites went into residential developments, and the rest were allocated to mixed-use developments, warehousing projects, and the development of retail, data centre, and hospital projects.
Debt financing in the real estate sector soared to a new peak in January-September 2024, surpassing $4.7 billion and marking a more than two-fold increase compared to the same period last year.
A significant portion of this financing, around 60%, was channelled into key markets such as Delhi-NCR, Mumbai, and Bengaluru, underscoring their pivotal role in the sector’s growth. Moreover, the sector’s adaptability was evident in the prevalence of multi-city deals, which accounted for over 30% of the total debt financing share, the report said.
Anshuman Magazine, chairman and CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “Projection for 2024 equity investments between $10-11 billion, highest-ever, underscores continued investor interest in the growing real estate market in India.”
With SEBI’s SM-REIT framework, he said, smaller but high-quality assets in Tier-II markets would also present new avenues for strategic capital deployment.
“We believe this regulatory support will add much-needed transparency, enabling a more diversified investment base and encouraging institutional participation across these markets,” Magazine said.
Going ahead, he said this growing diversification will not only solidify India’s real estate sector but also pave the way for future growth across emerging asset classes.
Anil Saraf, chairman, CII NR Committee on Real Estate and CMD, ASF Group, said, “The real estate sector is a cornerstone of India’s economy, contributing significantly to GDP and employment. Its role extends beyond construction and housing, driving growth in ancillary industries.”
