77% of investment in Indian real estate in 2019-23 by foreigners: Report

Global investors have 'consistently infused' average of $4 bn annually in the last five years, it says

Foreign inflows comprised 77 per cent of the total institutional investment in Indian real estate between 2019 and 2023, said a report on Wednesday, marking “continued confidence” in the sector.

The average annual total investment in the period was $5.1 billion, said real estate consultancy Colliers in its ‘2024 Investor Insights – Country Spotlight Series’ report. Of that amount, $4 billion was foreign inflow.

"Global investors have always remained at the forefront and consistently infused an average of $4 billion annually in the last five years, showcasing continued commitment and confidence towards the sector," said Piyush Gupta, managing director (Capital Markets & Investment Services) at Colliers India.

The office sector got the highest average inflow ($2 billion). It was followed by the alternatives sector ($0.5 billion) and industrial and logistics, residential, and mixed-use ($0.4 billion each).

"While strong preference continues for income-yielding office assets, residential, industrial, and alternatives are likely to witness renewed interest," the report said.

The United States and Canada are the top sources of capital in Indian real estate and there is growing interest from Asia-Pacific (APAC) countries Singapore, Hong Kong, South Korea, and Japan.

Inflows from APAC into Indian real estate doubled to $1.8 billion in 2023 from $0.9 billion in 2019, according to data in the report. In 2023, inflows from the region were 57 per cent higher than $1.1 billion in 2022.

APAC countries put 70 per cent of their India investments in office space and they are interested in residential, industrial, and warehousing assets too.

India's real estate market is likely to “witness increased activity” in 2024 due to high demand and a positive business environment. "Anticipation of heightened activity in a way reflects certainty around the policy environment, narrowing the gap between buyers and sellers, and investor intent to deploy more capital across real estate asset classes," the report said.