NEW DELHI: The real estate equity investments rose 46% year-on-year to $8.9 billion from January to September this year, surpassing the $7.4 billion total equity investments for 2023 according to a report by CBRE South Asia, a real estate consulting firm.
On a quarterly basis, equity investments in real estate stood at $2.6 billion in Q2 FY25.
Domestic investors (predominantly developers) took the lead with 79% share in equity capital inflows in Q2 FY25.
Singapore-based investors accounted for nearly 73% of the total foreign capital inflows, followed by the United States (~22%).
Developer activity picked pace in Q2 FY25, accounting for a share of nearly 47% in total equity investments, followed by institutional & collective vehicle investors (~36%).
Together Mumbai, Bengaluru and Chennai accounted for over 66% of total investments during this Q2 FY25.
Gaurav Kumar, managing director of capital markets and land in CBRE India, said, “A rebound in the office leasing market, strong disposable incomes and an unprecedented risk appetite for consumer spending and home buying has led to a record flow of investments in the first 9 months of 2024.”
Investors are expected to continue directing equity inflows towards metros and tier-I cities. However, SEBI’s SM REIT regulations also highlight investment opportunities in quality (but smaller) assets in tier-II locations.
During Q2 FY25, land/development sites dominated investments with a share of 45%, followed by the office sector with a 24% share.
The retail sector experienced a resurgence in capital inflows, capturing a ~22% share in the same quarter.
About 56% of the total capital inflows in site/land acquisitions were deployed for residential developments, while the remaining was committed towards the development of retail, data centers, warehousing projects, hospitals, etc.
In addition to the capital infusion of USD 2.6 billion in Jul-Sep ’24, investment, and development platforms worth ~USD 235 million were set up during the quarter across the hotels and residential sectors.
