India's real estate sector is set to achieve a historic milestone in 2024, with equity investments projected to surpass USD 10 billion for the first time, driven by robust deal activity in office and residential assets, according to a CBRE-CII report. Capital inflows reached USD 8.9 billion by September, marking a 46% year-on-year growth, with average deal sizes rising to USD 45 million.Domestic investors contributed USD 6 billion, while foreign investors, mainly from North America and Singapore, added USD 3.1 billion. Residential developments led investments, accounting for 64% of land and site inflows. Delhi-NCR, Mumbai, and Bengaluru attracted over 63% of total inflows, highlighting the sector's resilience and strong growth potential.
India's real estate sector is on the cusp of a historic breakthrough, with equity investments in 2024 projected to surpass USD 10 billion for the first time. A joint report by CBRE-CII emphasizes this significant achievement, driven by robust deal activity and renewed interest in office and residential assets. Capital inflows are expected to range between USD 10 billion and USD 11 billion, reflecting strong investor confidence despite global economic challenges.
In 2024, institutional and collective vehicle investors remained a significant source of capital for the Indian real estate market, making up nearly 40% of total investments from January to September. Developer companies led the way, accounting for over 41% of the total capital inflows during this period.
Domestic investors, primarily developers, injected nearly USD 6 billion in the first nine months of the year, capturing almost 65% of the overall capital inflows. In contrast, foreign investors contributed around USD 3.1 billion during the same period. Notably, investors from North America and Singapore were the major players, together representing roughly 85% of all foreign capital inflows.
The surge in equity inflows, which reached USD 8.9 billion in the first nine months of the year, marks a remarkable 46% year-on-year growth. According to the report, deal volumes continued to rise, with around 200 transactions reported compared to 151 in the same period last year. The average deal size also grew significantly, climbing to USD 45 million from USD 36 million in 2023. Mid-sized deals, ranging from USD 10 million to USD 50 million, played a pivotal role, representing 56% of total investments.
A resurgence in office sector inflows, growing by 50% year-on-year, underscores its appeal to investors. Alongside office assets, land and development sites attracted more than 70% of total inflows. Residential developments dominated this category, accounting for 64% of the investments, while mixed-use projects and infrastructure developments like data centres, warehouses, and hospitals also drew significant capital.
Major urban hubs such as Delhi-NCR, Mumbai, and Bengaluru led the charge, collectively capturing over 63% of total investments. Delhi-NCR emerged as the top recipient, with USD 2.3 billion in inflows, while tier-II and III cities, including Ludhiana, Mohali, and Coimbatore, collectively attracted USD 0.6 billion.
Debt financing also hit a record, exceeding USD 4.7 billion in January-September 2024, marking a twofold increase compared to the previous year. Approximately 60% of this financing was concentrated in key markets like Delhi-NCR, Mumbai, and Bengaluru, further emphasizing their strategic importance.
This milestone reinforces the resilience and adaptability of India's real estate sector. With increasing deal sizes, strategic foreign investments, and a robust acquisition pipeline, the industry is well-positioned for sustained growth in the coming years.
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