April 15, 2024: The first quarter of this year (Q1 2024) reported institutional investments of $552 million, registering a decline of 55% on year and 27% on quarter, according to a report by Vestian This steep fall could be attributed to the cautious approach of foreign investors amid global macroeconomic uncertainty. On the other hand, domestic investors showcased resilience and accounted for 98% of the total institutional investments received in the current quarter. Although the share has increased from 36% a year earlier, investments in value terms increased by only 21%. Domestic investors invested around $541 million across multiple deals during Q1 2024.
| Investor Type | Value ($ million) | % Change | % Share | |||||
| Q1 2023 | Q4 2023 | Q1 2024 | Q1 2024 vs Q1 2023 | Q1 2024 vs Q4 2023 | Q1 2023 | Q4 2023 | Q1 2024 | |
| Foreign | 791.4 | 299.8 | 11 | -99% | -96% | 64% | 40% | 2% |
| India-dedicated | 446.9 | 452.1 | 541.1 | 21% | 20% | 36% | 60% | 98% |
Shrinivas Rao, FRICS, CEO, Vestian, said, “Domestic investors are bullish about India’s growth story, continue to pour in investments in the real estate sector. On the other hand, foreign investors are cautious due to global macroeconomic uncertainty and geopolitical tensions.”
Commercial assets (office, retail, co-working and hospitality projects) garnered the highest investments of $232 million in Q1 2024, closely followed by residential assets at $225 million. Despite an increase in the share of commercial investments to 42% in Q1 2024 from 39% a year earlier, they declined by 52% in value terms. Similarly, the share of residential investments also increased to 41% in Q1 2024 from 27% in Q1 2023. However, investments declined by 33% annually in value terms. Investments significantly decreased by 73% in the industrial and warehousing sector in Q1 2024 over the previous year.
| Asset Type | Value ($ million) | % Change | % Share | |||||
| Q1 2023 | Q4 2023 | Q1 2024 | Q1 2024 vs Q1 2023 | Q1 2024 vs Q4 2023 | Q1 2023 | Q4 2023 | Q1 2024 | |
| Commercial | 484.8 | 571.0 | 231.6 | -52% | -59% | 39% | 76% | 42% |
| Residential | 337.7 | 63.0 | 225.0 | -33% | 257% | 27% | 8% | 41% |
| Industrial & Warehousing | 215.8 | 105.9 | 58.9 | -73% | -44% | 18% | 14% | 11% |
| Diversified | 200.0 | 12.0 | 36.7 | -82% | 205% | 16% | 2% | 6% |
| Total | 1,238.3 | 751.9 | 552.1 | -55% | -27% | 100% | 100% | 100% |
Bangalore dominated the institutional investments in Q1 2024 with $299 million, followed by NCR at $110 million. Both the cities together accounted for around 74% of the total investments received in the current quarter. Edelweiss Capital turned out to be the most active investor during the quarter with over $300 million worth of investments across the asset classes and geographies.
“The Indian real estate sector is expected to garner increased investments in the coming months on the back of a strengthened economic scenario and robust demand,” added Rao.
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Dhwani is a content management expert with over five years of professional experience. She has authored articles spanning diverse domains, including real estate, finance, business, health, taxation, education and more. Holding a Bachelor’s degree in Journalism and Mass Communication, Dhwani’s interests encompass reading and travelling. She is dedicated to staying updated on the latest real estate advancements in India.
Email: dhwani.meharchandani@housing.com
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