India’s real estate sector saw record investment inflows of USD 3.9 billion in the first half of 2024, according to a report from Cushman and Wakefield. The second quarter alone witnessed investment inflows of INR 231.5 billion (USD 2.77 billion), representing a 1.5x growth quarter-on-quarter and a 39% increase year-on-year.
The Logistics & Industrial (L&I) segment led the charge, accounting for 56% of the quarterly investments, with inflows into this segment being four times higher than the average of the previous 12 quarters.
Foreign investors played a significant role, contributing 76% of the total investments. Of these, 73% were directed towards the L&I sector, with the remainder allocated to office and residential segments. About 82% of the total quarterly inflow was deployed in asset acquisition deals.
Mixed-type deals, involving a combination of equity and structured debt, constituted 62% of the total quarterly inflows, while pure equity infusion deals made up 25%. Multi-city deals were prominent, capturing 59% of the quarterly inflows. Delhi NCR led city-focused investments with a 19% share, followed by Hyderabad (10%) and Bengaluru (8%).
For the first half of 2024, investment flows reached a record high of INR 322.8 billion (USD 3.9 billion), marking an 80% increase compared to the same period last year. The L&I sector captured 41% of the total H1 inflows, followed by the office sector at 31% and the residential sector at 26%. Bengaluru emerged as the leader among cities with a 13% investment share, while 42% of investments were spread across multiple cities.
Fund-raising activity in Q2 was tepid, totaling USD 238.2 million, driven predominantly by the office segment, which accounted for 84% of the total. H1 2024 recorded USD 800 million in fund-raising. Looking ahead, Embassy REIT plans to secure USD 400 million for debt repayment and strategic land acquisitions in Chennai. ASK Property Fund is
also aiming to raise USD 239 million, targeting mid-income and affordable residential segments in cities like Bengaluru, Pune, Mumbai, and Delhi-NCR.
Following SEBI’s notification, several fractional ownership platforms have started registering under the SM REIT regulations for income-generating properties, including commercial assets and rental housing. Brookfield REIT is set to acquire a dominant stake in a 3.3 million square foot portfolio at Worldmark Aerocity, New Delhi, worth USD 720 million. IndoSpace is planning to float an InvIT to raise USD 700-800 million, marking the largest L&I InvIT listing to date.
Corporate transaction volumes in Q2 reached INR 38.02 billion (USD 456 million), a 1.9x increase quarter-on-quarter and a 75% increase year-on-year. Mumbai led with a 55% share of the total transaction value, followed by Hyderabad at 18%. The first half of 2024 saw transactions close to INR 29.10 billion (USD 610 million), 75% to 1.28 times higher than the same period in the previous two years.
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