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Vestian: Domestic investors dominated institutional investments in Q1 2024 (Jan-March)

New Delhi, 13th April 2024: Q1 2024 reported institutional investments of USD 552 Mn, registering a decline of 55% on year and 27% on quarter. 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 USD 541 Mn across multiple deals during Q1 2024.

Investor Type Value (USD Mn) % 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%

Note: % change in value; % share of total institutional investments

Source: Vestian Research

Shrinivas Rao, FRICS, CEO, Vestian, “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 USD 232 Mn in Q1 2024, closely followed by residential assets at USD 225 Mn.

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 (USD Mn) % 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%

Note: % change in value; % share of total institutional investments Source: Vestian Research

Bengaluru dominated the institutional investments in Q1 2024 with USD 299 Mn, followed by NCR at USD 110 Mn. 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 USD 300 Mn worth of investments across the asset classes and geographies.

Rao further added, “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.”