After a steady start in Q1 2024, Q2 2024 saw accelerated momentum, registering USD 2.5 billion of inflows—the highest in any quarter since 2021. The industrial & warehousing segment accounted for the highest share of 61% of total investments, at USD 1.5 billion, led by select large deals in the segment. The residential segment also witnessed significant rise in quarterly inflows, 7.5X times compared to Q2 2023, capturing a 21% share of total institutional inflows into Indian real estate.
In contrast, with USD 0.3 billion of investments in office assets, the segment witnessed subdued activity in Q2 2024. Although the annual decline was significant at 83%, the QoQ drop was relatively modest at 41%. The surge in industrial & warehousing, and residential investments resulted in a healthy investment volume of USD 3.5 billion for H1 2024 at an overall level, making up for the slow start in first quarter. Foreign investments remained robust, accounting for 81% of the total inflows in Q2 2024, predominantly led by investors from the US and UAE.
During Q2 2024, the institutional investments in industrial & warehousing segment rose manifold, 11X times compared to Q2 2023 led by select large deals in the segment. Amidst rising demand for superior quality Grade A supply and evolving supply-chain models, investor confidence in the segment has significantly improved. With healthy demand momentum, global as well domestic investors are going to play a prominent role in consolidation of industrial & warehousing assets in the country. Amidst significant spurt in E-commerce and retail consumption in India, various asset-level investors are likely to enter the market, boosting the demand for AI enabled warehouses and micro-fulfilment centres in the upcoming quarters.
While at 72% share, multi-city deals continued to drive majority of the investment inflows during Q2 2024, Bengal uru and Delhi NCR together corresponded to about 23% of the total inflows during the quarter driven by foreign investments. About 56% of the quarterly inflows in Bengaluru were directed towards residential assets, followed by the office segment. Investments in the office segment were particularly strong in Delhi-NCR. Led by inflows into the office segment, Delhi NCR witnessed about 86% YoY rise in investment inflows during Q2 2024.
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