Foreign Investors Lead India’s Real Estate Boom in 2024
Foreign investors have taken the lead in India’s real estate sector during the first half of 2024, accounting for 65% of total investments, according to a report by JLL. 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 highlighted that the investment in the real estate sector during the first six months of the year has already covered around 81% of the total investment in 2023. This demonstrates 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 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% in the first half of 2024 from 37% in 2023. The average share of domestic investors in the last five years is 19%.
“India has once again demonstrated its impressive resilience in the face of global economic challenges, attracting substantial institutional investments totaling USD 4.8 billion in the first half of 2024. This is a remarkable 62% 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, attributed to regulatory reforms and improved transparency in the segment over the last 5-7 years. Investment towards this sector primarily weighed towards debt, with 68% of the deals being structured debt.
The report also noted that the office sector, historically the favored 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 with a 34% share of investments, followed closely by residential at 33% share. However, the warehousing sector’s investment surge was primarily driven by a single deal, accounting for over 92% 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. Looking ahead to the second 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.
