India’s Real Estate Attracts $3.5 Billion From Foreign Investors In H1 2024

In the first quarter of the calendar year, the real estate market attracted $995.1 million in foreign investments, while the second quarter experienced a significant increase, bringing in $2.5 billion

Nearly 70 per cent of investments in the year's first half were directed toward ready assets

Source : PTI

India's real estate sector drew in $3.5 billion from foreign institutional investors in the first half of 2024, positioning the country as the third most attractive global destination for land and development site investments, according to a report from investment management firm Colliers.

Foreign investments accounted for 73 per cent of total assets in India's real estate market, with cross-border capital exceeding $1.5 billion. Notably, the Asia-Pacific region alone contributed over $1.2 billion in inflows, as highlighted in the ‘Global Capital Flows Report.’ In the first quarter of the calendar year, the real estate market attracted $995.1 million in foreign investments, while the second quarter experienced a significant increase, bringing in $2.5 billion.

Nearly 70 per cent of investments in the year's first half were directed toward ready assets. The report indicates that India’s rapid growth and infrastructure development are expected to create additional opportunities in the developmental assets sector in the coming years. During this period, the industrial and warehousing sectors were particularly active, with investments in industrial assets increasing nearly fivefold compared to the same time last year. 

Piyush Gupta, managing director of Capital Markets & Investment Services at Colliers India, said, “Investor affinity is being driven by rising demand from the third-party logistics and E-commerce players and strengthening of manufacturing capabilities across key industrial corridors of the country,” said 

According to a Live Mint report, several new funds, including Mubadala, Mitsubishi Fudosan, PAG Credit & Markets, Cadillac Fairview, Korea Investment Corp, and PNB Malaysia, are actively exploring opportunities in India’s real estate market. These funds are either expanding their investments or forming new partnerships.

Additionally, India's luxury real estate sector is booming, with an expected compound annual growth rate (CAGR) of over 5 per cent from 2023 to 2028. Non-resident Indians (NRIs) are increasingly investing in this space, contributing $13.1 billion to the market last year. By 2025, NRIs are projected to account for 20 per cent of the country's total real estate investments, according to the report.

In contrast, transaction volumes across the Asia-Pacific (APAC) region have declined throughout 2024. While the first quarter mirrored the previous year’s activity, the second quarter experienced a 29 per cent drop compared to 2023.