Institutional Investments in Indian realty touch 3-year high

V Nagarajan

The industrial and warehousing segment accounted for the highest share of 61 per cent of total investments, at $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 per cent share of total institutional inflows into Indian real estate. In contrast, with $0.3 billion of investments in office assets, the segment witnessed subdued activity in Q2 2024.

Although the annual decline was significant at 83 per cent, the QoQ drop was relatively modest at 41 per cent.

The surge in industrial & warehousing, and residential investments resulted in a healthy investment volume of $3.5 billion for first half (H1) of 2024 at an overall level, making up for the slow start in first quarter. Foreign investments remained robust, accounting for 81 per cent of the total inflows in Q2 2024, predominantly led by investors from the US and UAE.

“Private equity investments in Indian real estate have shown remarkable resilience and strength in first half of the year at US$ 3.5 billion, reflecting robust market confidence. With foreign investments leading the charge at a significant 73 per cent share in H1, 2024, the sustained momentum is expected to drive positive sentiment for the entire year.

Sustained growth in FDI and domestic capital in Indian real estate reciprocates the attractiveness and the positive long-term outlook for infrastructure, construction, and real estate in India.

The domestic institutional and retail investor activity in Indian real estate is also expected to remain strong in second half of the year, driven by healthy economic activity and consumer confidence,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.

During Q2 2024, 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 and 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.

 “Driven by foreign investments, the industrial & warehousing segment witnessed about half of the total inflows in the first half of 2024.”

“Interestingly, institutional investments in the segment for H1, 2024 is almost twice the inflows in the entirety of 2023. With India’s manufacturing purchasing managers’ (PMI) Index staying close to 60.0 in the last few months, investor confidence in the industrial and warehousing segment is likely to remain strong throughout this year,” said Vimal Nadar, senior director and Head of Research, Colliers India.

While at 72 per cent share, multi-city deals continued to drive majority of the investment inflows during Q2 2024, Bengaluru and Delhi NCR together corresponded to about 23 per cent of the total inflows during the quarter driven by foreign investments.

About 56 per cent 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 per cent YoY rise in investment inflows during Q2, 2024.

My father died without leaving a Will and before I got married and now my sister says she is the sole owner of ancestral property. What is the legal status? Ranjitha, Sharjah.

As per Hindu Succession (Amendment) Act, 2005, children have the same right to the ancestral property despite your sister’s marital status. You will be categorised under Class I legal heir. As a result of which, the ancestral property will be equally divided between your mother, you and your sister.

I have invested in an apartment and let out. But there are internal repair issues which the association is refusing to interfere. How I do resolve this situation? Rajesh Chaund, Dubai.

Under the model byelaws, the expenditure with regard to the internal repairs will have to be borne by the concerned flat owners where the problem originates. If he is refusing, then the association can be requested to resolve in which case they will have the authority to carry out the repairs and the amount spent is recoverable. In the event of the flat owner not cooperating, you can approach the local court.