The Indian real estate market has experienced a surge in institutional investments, with foreign investors contributing significantly to the growth. Despite a quarterly decline from the previous quarter, the overall outlook for the sector remains positive. Foreign investors infused USD 436 million into the Indian real estate sector during Q3 2024 (July-September), marking a 139% year-on-year increase.
This influx of foreign capital has boosted the sector’s confidence and driven growth. While the share of domestic investors has declined slightly, the overall value of their investments has remained relatively stable. This indicates a continued interest from domestic investors in the Indian real estate market. Residential assets were the preferred choice for domestic investors, while foreign investors focused on commercial deals. The growing prominence of work-from-office mandates and global capability centers (GCCs) has attracted foreign investors to the commercial real estate sector, leading to a significant increase in their share. The share of residential investments has declined, but is expected to rebound in the coming quarters as niche asset classes like co-living, senior housing, and serviced apartments gain traction.
Chennai emerged as the top investment destination during Q3 2024, attracting a significant share of investments across industrial, warehousing, commercial, and residential sectors. Proptech platforms have also gained prominence in the Indian real estate market, with a 22% share of total investments. The increasing use of artificial intelligence and machine learning is expected to further drive growth in this sector. The positive outlook for the Indian real estate market is reinforced by the strong institutional investment interest. As the country’s economy continues to grow and infrastructure development accelerates, the sector is well-positioned for continued growth and expansion.