Investments into the real estate sector is seen hitting record levels in 2024, with equity investments in the range $10-11 billion by the end of the year, fuelled by land acquisitions and investments into the office sector, according to a report.

It will be the first time that investment flow is set to surpass $10 billion, due to a resurgence in interest in built-up office assets and a strong acquisition pipeline for land in the residential sector, according to a report by CBRE Research and CII.

In the nine months of 2024, close to $9 billion in equity investments have flowed into the sector, compared to the $7.4 billion that flowed into the sector in 2023, while the number of deals rose to 200 from 151 year ago, the report said.

Over 70 per cent of the investment flows were in land development and in the office sector. Around 64 per cent of the capital flows into land development were for building residences and the remaining for others such as warehouses, data centres and hospitals.

Institutional, developer interest

Developers have been major contributors to the fund flows into their projects, accounting for more than 41 per cent of the total capital inflows in the nine-month period. Institutions have also been significant investors in the real estate sector, accounting for over 40 per cent of the total inflows, the report showed.

Domestic investors, mostly developers have put in $6 billion in the period under review, while foreign investors have put in $3.1 billion. Investors from North America and Singapore have accounted for 85 per cent of foreign capital flows.

A good share of the investment flows were in the Delhi-National Capital Region, Mumbai, and Bengaluru, the three big real estate markets that is seeing most of the activity in residential projects, offices, global capability centres, data centres and warehouses.

In the period January to September 2024, inflows into Delhi-NCR was $2.3 billion. Tier 2 cities such as Coimbatore, Hubli, Indore, Ludhiana and Tuticorin are also receiving their fair share of investments.

Deal sizes have increased to $45 million from $36 million last year while more than half of the deals were in the range of $10-50 million, the report said.

Apart from equity, a good amount of debt financing is also flowing into the sector and in the nine months of 2024 it was over $4.7 billion, double the amount from year ago.

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