In Short:
In the first half of 2024, India’s real estate attracted $3.5 billion from foreign investors, making it the third top choice worldwide. Foreign investments made up 73% of the market, with strong activity in industrial and warehousing sectors. Non-resident Indians are driving luxury real estate growth, investing $13.1 billion last year, and expected to represent 20% of total investments by 2025.
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<h2>Mumbai's Real Estate Sector Thrives with $3.5 Billion in Foreign Investments</h2>
<p>In an exciting turn of events for India's real estate landscape, **foreign institutional investors** pumped a whopping <strong>$3.5 billion</strong> into the sector during the first half of 2024. This significant influx of capital has positioned India as the **third most sought-after global destination** for land and development investments, according to a recent report from the investment management powerhouse, **Colliers**.</p>
<h3>A Breakdown of Foreign Investment</h3>
<p>The surge in foreign investment accounted for an impressive <strong>73%</strong> of all investments within India’s real estate market. Notably, cross-border investments soared above <strong>$1.5 billion</strong>, with the **APAC region** alone contributing over <strong>$1.2 billion</strong> in inflows as highlighted in the ‘Global Capital Flows Report’.</p>
<h3>Quarterly Insights</h3>
<p>The first quarter of the year recorded foreign investments totaling <strong>$995.1 million</strong>, but the momentum really picked up in the second quarter, which saw investments jump to a staggering <strong>$2.5 billion</strong>.</p>
<h3>Focus on Ready Assets</h3>
<p>In a noteworthy trend, nearly <strong>70%</strong> of the funds allocated during this period were concentrated on ready assets. The report emphasizes that **India's rapid growth** and ongoing **infrastructure development** are set to introduce even more opportunities in the developmental assets space in the years to come.</p>
<h3>Industrial Sector on Fire</h3>
<p>The **industrial and warehousing sectors** emerged as frontrunners during this investment spree, with investments in industrial assets experiencing a remarkable nearly fivefold increase compared to last year.</p>
<h3>Driving Forces Behind Investments</h3>
<p>“The rising demand from **third-party logistics** and **E-commerce** entities, coupled with the strengthening of manufacturing capacities across key industrial corridors, is influencing investor interest,” remarked **Piyush Gupta**, Managing Director of **Capital Markets & Investment Services** at **Colliers India**.</p>
<h3>New Funds Entering the Scene</h3>
<p>A report from **Mint** earlier revealed that various new funds, including **Mubadla**, **Mitsubishi Fudson**, **PAG Credit & Markets**, **Cadillac Fairview**, **Korea Investment Corp**, and **PNB Malaysia**, have been actively eyeing opportunities in India’s real estate sector. These funds are either expanding their current investments or forming new partnerships.</p>
<h3>Luxury Real Estate on the Rise</h3>
<p>Another exciting development is the thriving luxury real estate market, which is anticipated to grow at a compound annual growth rate (CAGR) of over <strong>5%</strong> from 2023 to 2028. **Non-resident Indians (NRIs)** are particularly keen on this segment, having invested around <strong>$13.1 billion</strong> last year alone. By <strong>2025</strong>, NRIs are expected to represent a significant <strong>20%</strong> of India’s total real estate investments according to earlier reports from **Mint**.</p>
<h3>APAC Transaction Volumes Decline</h3>
<p>However, the situation in the **APAC region** tells a different story, as transaction volumes have faced a downturn throughout 2024. While the first quarter kept pace with the previous year's activity, the second quarter witnessed a stark <strong>29%</strong> drop in transaction volumes compared to 2023. This decline is largely attributed to a <strong>30%</strong> decrease in land and development site transactions across APAC, with **China** seeing a staggering <strong>40%</strong> year-on-year drop in sales.</p>
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