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. This shows a 62 per cent increase compared to the same period in 2023, showcasing investor confidence in India’s real estate market.
Despite a slight decline in real estate investments in the first quarter of 2024 compared to the previous year, 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, highlighting the dominant role of foreign investors in the market.
Chief Economist and Head of Research and REIS, India, JLL, Samantak Das, commented on India’s resilience in attracting institutional investments, especially in the residential sector, which achieved an all-time high half-year investment of USD 1.6 billion. This surge in investment can be attributed to regulatory reforms and improved transparency in the segment over the last 5-7 years, with a majority of deals being structured debt.
The report also noted a decline in investments in the office sector, historically the favoured asset class among institutional investors, in the first half of 2024. Warehousing sector leads at 34 per cent share of investments followed by residential at 33 per cent share, with a single deal driving over 92 per cent of the total transaction volume in the warehousing sector. This highlights the potential for investments in the growing warehousing sector in India.
Looking ahead to the second half of 2024, the report stated that India’s economy continues to show resilience and a positive outlook for the real estate sector. Private equity investment outlook remains strong, with an increasing interest in residential, office, warehousing, and other sectors. This diversification of interest indicates a growing confidence in India’s growth story and the potential for further investments in the real estate market.
In conclusion, foreign investors have played a significant role in driving investments in India’s real estate sector in the first half of 2024, with confidence in the country’s robust economy. The increasing interest in the warehousing sector, alongside continued resilience in the residential sector, demonstrates the potential for further growth and investments in India’s real estate market. As the country continues to attract institutional investments, the outlook for the upcoming half of 2024 remains positive, with a strong private equity investment outlook across various sectors.
