In a significant development for the Indian real estate sector, India has secured the fifth position in the Asia-Pacific (APAC) region for cross-border investments, attracting a substantial $3 billion in the first half of 2024. According to the latest report from Knight Frank, this amount constitutes approximately 9% of the total $11.5 billion invested across the APAC region. The findings underscore the resilience and appeal of India’s real estate market, particularly as the global economy anticipates a rebound in the latter half of the year.
The report highlights a notable trend in investment allocation, with the office sector emerging as the primary draw for foreign investors, claiming a robust 36% share of total investments. The industrial sector follows closely behind, attracting 30%, while the residential and retail segments accounted for 15% and 10%, respectively. This trend reflects a growing confidence among investors, driven by stable returns and consistent demand for commercial spaces. However, the road to recovery may be paved with challenges, as the report suggests that the potential for a 33% increase in cross-border investments in the second half of 2024 will hinge on various market dynamics.
In terms of rental markets, Delhi-NCR has emerged as the fifth most expensive office space rental market in APAC, with prime office rents reaching ₹340 per square foot per month. This sustained growth over six consecutive quarters speaks volumes about the region’s allure for businesses. In contrast, Mumbai’s prime office rents stand at ₹302 per square foot per month, ranking eighth in the APAC region. Despite Mumbai’s impressive year-on-year increase of 183.1% in office leasing, rental rates have remained stable, indicative of a well-balanced demand-supply equation. Meanwhile, Bengaluru, known for its vibrant IT sector, ranks as the 18th most affordable prime office market, with rents at ₹137 per square foot per month.
