CBRE South Asia Pvt. Ltd. report indicates a robust 46% Y-o-Y growth in real estate equity investments, totaling USD 8.9 billion in Jan-Sep ’24 —the highest-ever recorded since CY 2018, surpassing the USD 7.4 billion total equity investments for CY 2023. On a quarterly basis, equity investments in real estate stood at USD 2.6 bn in the Jul-Sep’24 period.
Domestic investors (predominately developers) took the lead with ~79% share in equity capital inflows in Jul-Sep ‘24. Singapore-based investors accounted for nearly 73% of the total foreign capital inflows, followed by the United States (~22%). Developer activity picked pace in Jul- Sep ’24 quarter, accounting for a share of nearly 47% in total equity investments, followed by institutional & collective vehicle investors (~36%).
Mumbai led the equity investment activity in Jul-Sep ‘24, along with Bengaluru and Chennai. Together, these three cities accounted for over 66% of total investments during this period. 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 Jul-Sept’24, 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 centres, 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.
Equity investments include those by private equity funds, pension funds, sovereign wealth funds. institutional investors, real estate developers, real estate fund-cum-developers, investment banks, corporate groups, and REITs, etc.
