India ranks 5th in APAC cross-border real estate investments: Knight Frank

Cross-border investment: India has emerged as the fifth-largest destination for cross-border real estate investments in the Asia-Pacific (APAC) region, securing 9 per cent of the total investment volume in the first half of 2024. This is according to Knight Frank's latest report, 'Asia Pacific Horizon: Look Beyond the Norms.' The report highlights that the total cross-border investments in APAC during this period reached $11.5 billion, with India receiving a substantial $3 billion from global private equity investors.

Office Sector Dominates Cross-Border Investments in India

Within the Indian real estate sector, the office market has proven to be particularly attractive, accounting for 36 per cent of the total cross-border capital allocation. This reflects the strong appeal of commercial real estate assets in the country. The industrial sector follows closely with 30 per cent of the investment share, while the residential sector secured 15 per cent, and the retail sector accounted for 10 per cent of the total investments.

Top 5 APAC Destinations for Cross-Border Capital

Australia leads the APAC region as the top destination for cross-border real estate investments, capturing 36 per cent of the total capital. It is followed by Japan with 23 per cent, Singapore with 11 per cent, Greater China with 10 per cent, and India with 9 per cent. These rankings underline India's growing significance in the global real estate investment landscape.

India's Real Estate Market Set for Growth

Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented on the report, stating, "The expected turnaround of global economies in the second half of the year is likely to encourage more foreign private equity players to take advantage of the country’s robust domestic macros. This influx of investment would boost the performance of Indian real estate and maintain the growth of industry assets.”

Anticipated Growth in APAC Cross-Border Investments

The report further projects a significant rise in cross-border investments across the APAC region, driven by the search for new investment opportunities and anticipated rate cuts. Cross-border investments in the region are expected to increase by over 33 per cent in the second half of 2024 compared to the same period in 2023. Among the key markets, Australia is poised to receive the highest volume of cross-border investments in H2 2024, marking a 129 per cent  increase from the previous year.

Outlook for 2024

For the full year 2024, Australia, Japan, and Singapore are expected to remain the top three destinations for cross-border capital, with estimated shares of 36 per cent, 23 per cent, and 11 per cent, respectively.

Christine Li, Head of Research at Knight Frank Asia-Pacific and author of the report, remarked, “Historical analyses of previous crises, including the Global Financial Crisis, the Chinese economic slowdown, and the Covid-19 pandemic, demonstrate that transaction volumes in the region typically normalise within 30 months. Currently, we are in the 24th month of the high-interest-rate-induced downturn, suggesting the second half offers a prime investment window for undervalued assets. Early indicators of recovery are already observed in Australia and South Korea.”