India's real estate market is experiencing a significant surge in cross-border investments, securing a robust $3 billion in the first half of 2024. This impressive figure, highlighted in a Knight Frank report, positions India as a key player in the Asia-Pacific (APAC) region's real estate landscape.

India Ranks Fifth in APAC Cross-Border Investments

Within the APAC region, India ranked fifth in attracting cross-border real estate investments, accounting for 9% of the total volume. This substantial inflow of capital underscores the country's strong appeal and robust domestic macros, which are increasingly enticing global private equity investors.

Office Sector Leads Investment Allocation

The Indian office sector emerged as a dominant force, capturing 36% of the total global capital allocation in real estate. This reflects the strong appeal of commercial real estate assets in India, followed closely by the industrial sector with a 30% share. The residential and retail sectors also received notable investments, with 15% and 10% respectively.

Strong Appeal to Foreign Private Equity

Shishir Baijal, Chairman and Managing Director of Knight Frank India, expressed optimism about the future. "The expected turnaround of global economies in the second half of the year is likely to encourage more foreign private equity players to take advantage of the country’s robust domestic macros," he stated.

APAC Investment Outlook for H2 2024

Looking ahead, cross-border investments in APAC real estate are projected to increase by a third in the second half of 2024. The office sector is expected to maintain its dominance, attracting 30% of these investments, followed closely by the logistics sector at 29%.

Among key gateway markets, Australia is poised to receive the highest volume of cross-border investments in H2 2024, with a projected 129% increase from the previous year. For the full year 2024, Australia, Japan, and Singapore are expected to be the top three investment destinations.

Opportunity in the Midst of Downturn

Christine Li, Head of Research at Knight Frank Asia-Pacific, highlighted a potential investment window. "Historical analyses of previous crises... demonstrate that transaction volumes in the region typically normalise within 30 months," she explained. "The region is currently in the 24th month of the high interest-rate-induced downturn, suggesting that the second half of the year would offer a prime investment window for undervalued assets."

This surge in cross-border real estate investments not only signals confidence in India's economic trajectory but also holds the potential to stimulate growth and development in key sectors across the country.

-source: thehindubusinessline.com