Institutional investment in real estate reached at $1 billion in Q1 of FY24: Report

Real estate investment: In the first quarter of 2024, the real estate sector witnessed institutional investments reaching $1.0 billion. Although this marked a 40 per cent decrease compared to the same period last year, there was a notable 21 per cent increase from the previous quarter, indicating a positive trajectory. Foreign investors remained dominant, contributing to 55 per cent of the total inflows, while domestic investments also saw a significant rise, increasing by 15 per cent year-on-year.

Piyush Gupta, Managing Director of Capital Markets & Investment Services at Colliers India, pointed out the growing prominence of domestic investors in the Indian real estate landscape. He highlighted the surge in domestic investments, particularly in office and residential assets, showcasing investor confidence in India's growth prospects.

The office sector continued to attract the majority of investments, accounting for $ 0.6 billion or 57 per cent of total inflows in Q1 2024. Foreign investors played a key role in this segment, reflecting their trust in India's commercial office market fundamentals. Cities like Bengaluru and Hyderabad emerged as hotspots for office investments, reflecting strong demand for Grade A office spaces.

On the other hand, the industrial and warehousing segment maintained its momentum from the previous year, capturing an 18 per cent share of total inflows in Q1 2024. 

With $0.2 billion invested during the quarter, the segment showed consistent growth, driven by evolving trends such as micro-fulfillment centers and AI-driven supply chains. As the segment continues to evolve, experts anticipate further consolidation and institutionalisation, attracting additional global capital in the years to come.