Property Investment in Delhi
As real estate sector attracts record investment of USD 3.9 billion in H1 2024, driven by strong Q2 inflows, Delhi-NCR, with USD 532 million of investment takes a dominant position recording a 74 percent YoY increase.
India’s real estate market experienced a remarkable surge in investments during Q2 2024, attracting a significant USD 2.77 billion, according to Cushman & Wakefield’s latest Capital Market Beat report. This impressive influx propelled the total investments for the first half of 2024 to a record-breaking USD 3.9 billion. According to the report, the second quarter’s performance marks a 1.5x increase in comparison to the previous quarter and a substantial 39 percent growth year-on-year, demonstrating continued investor confidence in the Indian real estate market.
In terms of cities, Delhi-NCR emerged as the top destination for private equity investments in Q2, attracting USD 532 million and capturing 19 percent of the total share of investments. This marks a significant 74 percent year-on-year increase. The city maintained its lead in H1 as well, securing USD 633 million of inflows, or 16 percent share of the record USD 3.9 billion investment in the sector. The surge in investments in Delhi has been primarily driven by the office segment, with major equity buyouts by prominent fund houses. Residential sector in the city has also seen continued interest specially in the high-end and luxury segment.
Delhi was followed by Bengaluru with 13 percent (USD 509 million) and Hyderabad with 8 percent (USD 320 million) in investment share for H1. Multi-city deals accounted for the remaining 48 percent (USD 1,862 million) of the investments, reflecting a diversified investment strategy across various regions.
In terms of sectors, the surge in investments this quarter was dominated by the Logistics & Industrial (L&I) sector, which captured 56 percent of the total investments (1,542 USD million) and maintained its leading position with 41 percent of the total H1 inflows. The office sector followed closely for both Q2 and H1 with USD 924 million investments in Q2 and USD 1,196 million in H1. Residential came third with USD 309 million investments in Q2 and USD 1,002 million in H1.
Foreign investors played a crucial role, contributing 76.3 percent of the total investment volume in Q2 2024, with a significant portion of these investments directed towards the L&I sector. Deals involving a combination of equity and structured debt constituted 62 percent of the total inflows, while pure equity infusion deals made up 25 percent.
On the macro-economic side, the manufacturing sector grew by 9.9 percent year-on-year, and the tertiary sector grew by 7.6 percent annually. GST collections for June 2024 rose by //percent year-on-year, indicating robust domestic transaction volumes.
According to Somy Thomas, Managing Director, Valuation & advisory and Capital Markets, Cushman & Wakefield, USD 3.9 billion of private equity inflows during the first half of 2024, already surpassing 70 percent of last year’s total, highlights the remarkable growth and investor confidence in India’s real estate market. This surge is primarily driven by infrastructure-related sectors like logistics and industrial, fueled by significant public investments in multi-modal economic corridors. The strong demand for office and residential spaces further solidifies the market’s appeal. With continued positive momentum, it is going to be a buoyant year for private equity investments in the commercial real estate sector, potentially exceeding initial expectations.
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