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Institutional investments in the Indian real estate sector experienced a significant decline of 55 percent year-on-year in the first quarter of 2024, totaling USD 552 million, according to data from Vestian, a global property consultant.
The cautious approach of foreign investors resulted in a minimal inflow of just USD 11 million, marking a staggering 99 percent decrease from the same period last year when it stood at USD 791.4 million.
In contrast, domestic investors remained strong, injecting USD 541.1 million into the sector during January-March 2024, representing a notable 21 percent increase from the previous year’s USD 446.9 million.
Vestian CEO Shrinivas Rao attributed the disparity in investment patterns to the differing sentiments among investors. While domestic investors remain optimistic about India’s growth trajectory, foreign investors are adopting a cautious stance due to global macroeconomic uncertainties and geopolitical tensions.
Commercial assets, including office spaces, retail outlets, co-working spaces, and hospitality projects, emerged as the primary attraction for investments, garnering USD 231.6 million in the first quarter of 2024. This figure, however, marked a decline from the USD 484.8 million recorded in the corresponding period of the previous year.
Meanwhile, institutional investments in residential assets witnessed a 33 percent decrease, dropping to USD 225 million from USD 337.7 million in the year-ago period.
Investments significantly decreased 73 per cent in the industrial and warehousing sector to USD 58.9 million in the January-March period from USD 215.8 million a year ago.
Bengaluru dominated the institutional investments during the quarter with USD 299 million, followed by Delhi-NCR at USD 110 million.
Both cities together accounted for around 74 per cent of the total investments received in the current quarter.
Edelweiss Capital turned out to be the most active investor during the quarter with over USD 300 million worth of investments across the asset classes and geographies, Vestian said.
“The Indian real estate sector is expected to garner increased investments in the coming months on the back of a strengthened economic scenario and robust demand,” Rao said on the investments outlook.
With inputs from PTI
