India has secured the 5th position in cross-border real estate investments in the Asia-Pacific (APAC) region, as per Knight Frank’s latest report, ‘Asia Pacific Horizon, Look Beyond the Norms.’ In the first half of 2024, India attracted 9% of the total investment volume in the region.
Significant Investment in Indian Real Estate
During this period, total cross-border investments in APAC reached USD 11.5 billion, with India receiving USD 3 billion from global private equity investors. The office sector in India drew the most attention, accounting for 36% of the total global capital. The industrial sector followed with 30%, the residential sector received 15%, and the retail sector accounted for 10%.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, stated, “The expected economic turnaround in the second half of the year is likely to attract more foreign private equity players, benefiting from India’s strong domestic economy. This influx of investment will enhance the performance of Indian real estate and sustain industry growth.”
Future Trends in Cross-Border Investments
Cross-border capital flows are significantly impacting the commercial real estate market in APAC, creating new investment opportunities. Anticipated interest rate cuts could lead to a more than one-third increase in cross-border investments in the second half of 2024 compared to the same period in 2023.
Australia is expected to receive the highest volume of cross-border investments in the second half of 2024, with a 129% increase from the previous year. For the entire year of 2024, Australia, Japan, and Singapore are predicted to be the top destinations for cross-border capital, with estimated shares of 36%, 23%, and 11%, respectively.
Christine Li, Head of Research at Knight Frank Asia-Pacific and author of the report said, “Historical data from previous crises, such as the Global Financial Crisis, the Chinese economic slowdown, and the Covid-19 pandemic, shows that transaction volumes in the region typically normalize within 30 months. We are currently in the 24th month of the high-interest-rate-induced downturn, indicating that the second half of the year offers a prime investment window for undervalued assets. Early signs of recovery are already seen in Australia and South Korea.”
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