Foreign investors infuse $436 mn in real estate in Q3 2024, up 139%: Report

The Indian real estate sector received foreign institutional investments (FII) of $436 million during the third quarter of the calendar year 2024 (Q3 2024), according to Vestian Research. The investments were 139 per cent higher compared to the corresponding period of the previous year but down by 80 per cent on a quarterly basis.

Overall, the sector received institutional investments of $0.96 billion during the quarter, up 41 per cent year on year (Y-o-Y), but down by 69 per cent quarter on quarter (Q-o-Q).

The share of foreign investors increased from 27 per cent in Q3 2023 to 46 per cent in Q3 2024, owing to “India’s robust economic growth amid prevailing geopolitical challenges.”

In contrast, the share of domestic investors declined to 43 per cent in Q3 2024 from 71 per cent in the same quarter a year earlier, a decrease of about 15 per cent in terms of value.

Shrinivas Rao, FRICS, chief executive officer at Vestian, said, “Investors have shown confidence in India’s growth story on the back of robust GDP growth. As a result, the real estate sector witnessed increased participation from foreign investors, leading to institutional investments touching the billion-dollar mark in Q3 2024.”

Further, as per the research, in Q3 2024, domestic investors preferred residential assets, whereas foreign investors accounted for 64 per cent of the commercial deals.

“The growing prominence of work-from-office mandates and global capability centres (GCCs) lured foreign investors, leading to an increase in the share of investments in commercial real estate from 24 per cent in Q3 2023 to 71 per cent in Q3 2024. On the other hand, the share of the residential sector reduced to 19 per cent in Q3 2024 from 44 per cent in the same period a year earlier,” the report said.

Interestingly, Chennai alone received about 48 per cent of total investments during the quarter.

Moreover, proptech platforms received investments worth $212 million during Q3 2024. The share is likely to increase further with the extensive use of artificial intelligence and machine learning in the real estate sector, as per the report.