India Secures Fifth Spot in Asia Pacific Real Estate with US$3bn in Cross-Border Investments

• 17 August 2024
• Property Focus
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India has emerged as the fifth largest recipient of cross-border real estate investments in the Asia Pacific region, attracting US$3 billion in the first half of 2024. This substantial inflow of global capital, constituting 9% of the region’s total investment volume, underscores India’s growing prominence in the international real estate market, according to Businesstoday, published on 03 August 2024.

The data, released in Knight Frank’s report ‘Asia Pacific Horizon: Look Beyond the Norms’, reveals that the total cross-border investments in the Asia Pacific region reached US$11.5 billion during this period.

The office sector has proven to be the most attractive for global investors, securing 36% of the total capital allocation. This reflects the robust demand for commercial real estate assets in India. The industrial sector follows closely, claiming 30% of the investment, while the residential and retail sectors received 15% and 10%, respectively.

India’s position as a top destination for cross-border capital flows is highlighted alongside other major markets in the Asia Pacific region. Australia leads the pack, accounting for 36% of the total cross-border investments, followed by Japan with 23%, Singapore with 11%, Greater China with 10%, and India with 9%.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented on the future outlook, saying, “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. This influx of investment would boost the performance of Indian real estate and maintain the growth of industry assets.”

In addition to the broader market trends, Knight Frank India’s separate report reveals that Delhi-NCR ranks as the fifth most expensive office rental market in the Asia Pacific region, maintaining a prime office rent of US$4.10 per square foot per month. Meanwhile, Mumbai holds the eighth position with a prime office rent of US$3.65 per square foot per month, showcasing significant growth in office leasing activity.

The report further emphasises the impact of cross-border capital on the commercial real estate market in the Asia Pacific region, with predictions of a potential surge in investments during the latter half of 2024. This growth is anticipated to outpace that of the previous year, driven by expected rate cuts.

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