The CBRE-CII joint report highlighted that the overall equity investments in 2024 in the real estate sector are set to hit a new record surpassing USD 10 billion for the first time. With a resurgence in investment inflows in built-up office assets and a strong acquisition pipeline for land in the residential sector, overall equity investments in CY 2024 would be anticipated to in the USD 10 -11 billion range.
This year, institutional and collective vehicle investors continued to be a major source of capital deployment in the Indian real estate sector, accounting for nearly 40% of the overall investments from January to September 2024. Developer companies led the total capital inflows with more than 41% share in this period.
Domestic investors (predominantly developers) invested nearly USD 6 billion during the first nine months of the calendar year, dominating the overall capital inflows with an almost 65% share. In comparison, foreign investors contributed about USD 3.1 billion during the same timeframe. Notably, North American and Singaporean investors were the significant contributors, representing approximately 85% of all foreign capital inflows.
Equity capital inflows touched USD 8.9 billion between January and September, registering a 46% Y-o-Y growth. The strong momentum in deal volume continued, with about 200 deals reported during this period, compared to 151 deals in the same period last year. The average deal size also increased to nearly USD 45 million in the first nine months of 2024 from about USD 36 million in 2023. Mid-sized deals, ranging between USD 10-50 million, represented 56% of the total investment inflows during this period.
The office sector witnessed a resurgence of inflows during January-September 2024, with a nearly 50% Y-o-Y growth. Land/development sites and the office sector cumulatively attracted more than 70% of the investment flows during this period. Residential, retail, and mixed-use sectors also experienced a significant rebound in capital inflows, capturing a healthy share of the overall capital inflows in the first nine months of 2024. Nearly 64% of the capital inflows in the land/development sites went into residential developments, and the rest were allocated to mixed-use developments, warehousing projects, and the development of retail, data centre, and hospital projects.
Gateway cities such as Delhi-NCR, Mumbai, and Bengaluru remained the preferred markets with a cumulative share of over 63% in investment inflows in January-September 2024; Delhi-NCR witnessed the highest share of 26% in capital inflows (amounting to USD 2.3 billion). Equity capital inflows into tier-II and III cities also reached nearly USD 0.6 billion, with Ludhiana, Mohali, Tuticorin, Hubli, Coimbatore, and Indore collectively accounting for 76% of these inflows.
Debt financing in the real estate sector soared to a new peak in January-September 2024, surpassing USD 4.7 billion and marking a more than twofold increase compared to the same period last year. A significant portion of this financing, around 60%, was channelled into key markets such as Delhi-NCR, Mumbai, and Bengaluru, underscoring their pivotal role in the sector's growth. Moreover, the sector's adaptability was evident in the prevalence of multi-city deals, which accounted for over 30% of the total debt financing share.
