[GAGA REALTY] [JOINT VENTURE] [GAGA HOMES]
India’s realty sector faced robust institutional inflows in the September quarter, underscoring sustained confidence from domestic and overseas investors.Institutional investment in the office segment made a strong comeback, surging 6.8 times from a year earlier to $600 million in the quarter. Investment in the office segment had plunged 83% year-on-year in the June quarter to $329.6 million as funds remained cautious.Residential assets too faced notable inflows in Q3 2024 at $400 million, growing 40% from a year earlier, according to data from real estate services firm Colliers.Foreign investments comprised 88% of total institutional inflows into the office segment during Q3 2024, marked by large deals by global funds like ADIA, GIC, Keppel Land and MapleTree.“The investors are well diversified between global and domestic capital. While office assets remain a key focus, industrial & warehousing and residential segments are gaining significant momentum. The newer emerging themes like fractional ownership in office & warehousing, residential platforms with developers, flexible credit, and hospitality are driving opportunities for investors. With continued momentum, 2024 is expected to end on a higher note, likely surpassing 2023 volumes,” said Piyush Gupta, managing director, capital markets & investment services at Colliers India. The office segment secured most of the investments, followed by warehousing and residential properties. Overall investments by institutions reached $1.1 billion in the September quarter, a 45% surge from a year earlier.“Institutional investors are reaffirming their confidence in office assets in India, driven by the country’s growing economy and strong demand for quality office spaces, particularly from IT, BFSI, and multinational companies. Unlike more mature markets, India offers a unique combination of high growth potential, attractive yields, and a relatively low entry point for investors makes Indian office assets an appealing long-term investment,” said Chayan Chakravarti, former head of indirect strategies-APAC for Ivanhoe Cambridge Canadian real estate investment company.Chennai and Mumbai together comprised about 57% of total inflows in Q3 2024 backed by key acquisitions in the office segment. Nearly 70% of the inflows in Chennai were led by foreign investments. In the residential segment, Mumbai and Delhi NCR attracted about 44% of total investments.Most of the investments in the residential segment were directed towards developmental assets, as institutional investors continue to partner with reputed developers in marquee residential projects.”Private equity investors are increasingly looking to invest in India’s residential segment due to its high growth potential, strong demand, and attractive returns. Additionally, the growing preference for gated communities and luxury housing has opened opportunities for higher-value investments. For private equity investors, this segment offers the benefits of equity-like returns making it a lucrative asset class in India’s evolving real estate landscape,” said Amit Bhagat, chief executive and managing director of ASK Property Fund.Total institutional inflows of $4.7 billion were recorded in the first half of 2024. In addition to continued inflows of local capital, foreign investors also kept a sizable and a healthy appetite for Indian real estate.In the last two to three years, there has been a notable surge in office demand across various markets and sectors, resulting in record-high leasing activity each year after almost three years of consolidation and subdued demand for fresh leasing. Demand for office space in Bengaluru, Hyderabad, and Mumbai in the first three quarters of 2024 has either reached or exceeded levels seen in 2023. Major corporations such as BNY Mellon, Salesforce, Synopsis, and Bosch have secured large office spaces ranging from 600,000 sq ft to 900,000 sq ft.
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