Industrial, warehousing sectors help inflows in June qtr to rise to $2.5B

Institutional investments in India’s real estate sector touched a three-year high of $2.5 billion in the June quarter backed by robust activity in the industrial and warehousing, and residential segments, according to Colliers, a global real estate consulting firm.

The industrial and warehousing segment acco- unted for 61% of total investments at $1.5 billion, Colliers said in its latest report. Institutional in- vestment in this segment soared 11 times from Q2 2023, led by select large deals.

The residential segment also saw strong growth, clocking a 7.5 times surge from a year earlier at 543.5 million, achieving a 21% share. However, institutional inflows into the office sector plunged 83% in Q2 2024. Investments fell 41% sequentially.

Industrial and warehousing segment accounted for 61% of total investments at $1.5 b, Colliers said

“The increase in demand for residential properties has driven developers to procure land for residential purposes, attracting more capital. Conversely, investments in office spaces have decreased due to the saturation of high-quality in- come-generating assets being traded and held by strong investors. We will see more fund flows into the residential segment for land acquisition in the coming quarters,” said Vikas Chimakurthy, chief executive at Kotak Realty Fund.

June quarter also saw more foreign participation led by US and UAE-based investors such as Maple Tree, ADIA, GIC, and Xander, collectively holding an 81% share.

“With foreign investments leading the charge, the sustained momentum is expected to drive positive sentiment for the entire year. Sustained growth in FDI and domestic capital in Indian real estate reciprocates the attractiveness and the positive long-term outlook for infrastructure, construction, and real estate in India,” said Piyush Gupta, managing director of capital markets & investment services at Colliers India.

Amidst rising demand for Grade A supply and evolving supply-chain models, investor confidence in the industrial and warehousing segment has significantly improved.

Source – Economic Times

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