Institutional investment inflows in Indian realty touch $1.1b in Q3

V Nagarajan

Following significant inflows in the first two quarters, Q3, 2024 too registered healthy investment inflow of about $1.1 billion, reflecting a 45 per cent YoY growth, according to Colliers survey.

Office segment accounted for 54 per cent of the total investments during the quarter, followed by residential, with a 33 per cent share.

Residential inflows during the Q3, 2024 were particularly driven by domestic capital.

Overall domestic investments remained robust at $0.5 billion, driving 44 per cent of the total inflows during the quarter.

“The newer emerging themes like fractional ownership in office & warehousing, residential platforms with developers, flexible credit, and hospitality are driving opportunities for investors.

Of the total $4.7 billion institutional inflows during the first nine months of 2024 (Jan-Sept), over 60 per cent were directed towards industrial & warehousing and residential assets. With continued momentum, 2024 is expected to end on a higher note, likely surpassing 2023 volumes,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.

In addition to continued traction in domestic capital, foreign investors also maintained a sizeable and a healthy appetite for Indian real estate.

At $0.6 billion inflows in Q3, 2024, foreign investments have more than doubled compared to the investments witnessed in Q3, 2023.

After witnessing subdued activity in the previous quarter, investments in the office segment doubled on a QoQ basis, at $0.6 billion inflows.

At the same time, investments also rose by 6.8x times as compared to the same period last year. Foreign investments accounted for 88 per cent of the total inflows into the segment during Q3, 2024.

Going forward, robust demand and supply momentum in Grade A office spaces across the top markets will keep the investor confidence buoyant.

Apart from office assets, residential assets too witnessed notable inflows during the quarter at $0.4 billion, witnessing a substantial surge of 40 per cent on a YoY basis.

“Private equity investments in the residential segment are on the rise, fuelled by home-ownership trends and growing interest from domestic as well as foreign institutional investors.”

“In the first nine months of 2024, investments in the segment crossed $1 billion, marking a significant 46 per cent year-on-year increase. Q3, 2024 alone saw $0.4 billion in residential investments, accounting for one-third of the total investments in the quarter.”

“Most of these investments were directed towards developmental assets, as institutional investors continue to partner with reputed developers in marquee residential projects. With a conducive domestic environment, ongoing festive season and a much-anticipated reduction in interest rates, investor confidence in India’s residential real estate market is poised to remain intact,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Chennai and Mumbai together accounted for about 57 per cent of the total inflows during Q3, 2024 backed by key acquisitions in office segment.

Almost 70 per cent of the inflows in Chennai during the quarter were driven by foreign investments. Mumbai and Delhi NCR cumulatively witnessed about 44 per cent of the total quarterly investments in the residential segment.

Furthermore, multi-city investments corresponded to 30 per cent of the overall inflows during Q3, 2024 and were predominantly directed towards office and residential asset classes.

I sold a villa recently and intend selling another joint property with my wife’s name. Can I invest in a new property by including my children as co-owners? Will the tax exemption available ? Bhargava Sharma, Sharjah.

Section 54 (1) clear specifies for sellers of existing units to either purchase a new residential house within one year before or two years after the date of sale of original residential property or construct a new residential house within three years from the date of sale of original residential unit.

If the statutory requirements are complied, both of you are entitled to exemption irrespective of the fact if the new house is jointly owned among family members.

My relative wants to gift an immovable property located in Bengaluru? Does it require registration? Kasim, Dubai

Gifting immovable property should be accompanied with a registered gift deed. Once the immovable property is registered along with a gift deed in your name, you get the legal ownership of the property and right to possession to such property.