India real estate investments up 3% to USD1.1b in Q1

The residential sector accounted for over 60% of the investments.

According to a recent Cushman and Wakefield report, India’s investment activity recorded in Q1 was INR 91.3bn (USD 1.1bn) which was 39% lower than the previous quarter’s volume, although 3% higher on a y-o-y basis. 

“The residential sector dominated with 63% of quarterly investment. In absolute terms, it is almost double the quarterly average for residential seen in the past 8 quarters. Almost 48% of investment in the residential sector was focused on early stages of development across top-8 cities,” the report said.

Here’s more from Cushman and Wakefield:

The uptick in share of domestic investors witnessed in 2023 continues in Q1-24, with their share accounting for 57% of total quarterly investments, whereas foreign investors and collaborative (or mixed) deals comprised the remaining. Bengaluru emerges as the leading city, commanding a 25.6% share in investments, with the majority share (63%) getting allocated to the office sector. Pune secured the second position in investment volume, claiming 14% share. 

Equity investments’ share in total investments stood at 58%, rendering it the lowest share that equity has seen in over eight quarters, largely driven by high interest rate environment and global geopolitical uncertainties. Conversely, debt investments surged to double the quarterly average level of the last eight quarters, and almost all of that was directed towards the residential sector. Office sector continued to be the preferred sector among equity investors, accounting for 43%, closely trailed by residential investments at 38%. Early-stage deals, despite showing a slowdown from last quarter, continued to remain in line with the average in-flows over the past 8 quarters. 

First quarter marked moderate fundraising activity totaling USD 563 million, predominantly driven by the residential segment accounting for 93% of the total. In the near term, Embassy REIT has plans a USD 400 million fund raise, earmarked for the strategic land acquisitions in Chennai. The fund raise activity is expected to improve in upcoming quarters given a steady real estate activity witnessed.