India’s real estate investment surges 88% YoY in APAC region

V. Nagarajan

Real estate investments in the Asia Pacific market increased 12 per cent year-on-year to reach $155.9 billion in 2024, according to Colliers’ new report – ‘Asia Pacific Investment Insights H2 2024’.

This growth underscores the continued resilience of the region’s top nine markets – Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand and Taiwan.

Within the APAC region, India continued to exhibit strong momentum with H2, 2024 witnessing 88 per cent annual rise in investments at $3.0 billion.

Office assets continued to draw majority of the investments at 47 per cent share, followed by industrial & logistics at 27 per cent share.

Mumbai attracted almost half of the investments during H2 2024, primarily led by acquisition of office assets, said the report.

According to the report, South Korea, Japan, and Mainland China together accounted for 59 per cent of total $83.2 billion real estate investments in H2 2024. India, South Korea, Taiwan, and Australia, meanwhile saw significant investment growth, each recording more than 30 per cent year-on-year increases during the period.

Office and industrial & logistics remained key segments in H2 2024, driving around 60 per cent of the total investments. Retail and hospitality segments too experienced a significant rebound, with retail investments increasing 31 per cent year-on-year to $15.0 billion during H2 2024.

Both Australia and South Korea saw inflows exceeding $3.0 billion in the retail segment, reflecting renewed investor confidence in asset classes.

“Institutional investments in Indian real estate have shown remarkable growth, with 2024 witnessing a 22 per cent rise in capital inflows at $6.5 billion. This momentum is expected to continue in 2025, driven by favorable economic growth prospects and optimistic investment sentiments. Moreover, the anticipated continuity in easing of monetary policy including further reduction in repo rate, is expected to enhance liquidity and drive transactional activity across real estate segments in 2025.

Diverse investment opportunities along with proactive government policies are likely to support robust capital deployment across core and non-core assets throughout 2025,” according to Badal Yagnik, Chief Executive Officer, Colliers India. “Steady growth in investment volumes underscores India’s prominence as a preferred real estate investment destination for both domestic and foreign capital. In H2 2024, foreign investments accounted for 57 per cent of total inflows, while domestic investments, at $1.3 Billion, saw a notable 8 per cent YoY growth.

In addition to the USA, Canada and the EU, investment inflows from other countries in the APAC region will remain buoyant in 2025 and are likely to account for a significant portion of institutional investments in Indian real estate. Looking ahead, while global investors will continue to diversify their real estate portfolios, domestic investors are expected to make further inroads in segments with relatively higher yields such as office and industrial & warehousing,” according to Vimal Nadar, Senior Director & Head of Research, Colliers India.

According to Chris Pilgrim, Colliers’ Managing Director of Global Capital Markets, Asia Pacific, “the resilience of the Asia Pacific real estate market is undeniable, with institutional investments rising and demonstrating strong growth last year, setting the stage for a robust 2025.

“The office segment will continue to witness strong momentum, underpinned by robust leasing and corporate expansions in key markets, and industrial & logistics and residential investments will remain significant, drawing from long-term stable structural demand. We expect retail, hospitality and alternative asset classes gain traction as the year progresses, as investors move to capitalize on recovery momentum and evolving consumer trends.”

Overall, real estate investment volumes in the Asia Pacific region are likely to remain sturdy in 2025, amidst easing inflation, healthy economic growth prospects and declining borrowing costs across major markets.

Q: I sold a property recently and got Rs20 million and wish to invest in two properties. Can I claim capital gains exemption? Ashita Aju, Sharjah.

A: You can claim capital gains tax exemption as the 2019 amendment permits to claim exemption up to two residential properties if the capital gains do not exceed Rs 20 million. Yet another stipulation is that reinvestment should be done within two years or construction within three years, failing which it must be deposited in the capital gains account scheme.

Q: I recently acquired foreign citizenship. As a resident in India earlier, I had invested in agricultural land and farmhouse in Delhi. Can I continue to hold these assets or is it admissible under the law to sell these properties? Please clarify. Kapil Patel, Dubai.

A: Yes.  You can continue to hold these assets acquired as a resident in India.  Under the FEMA Act, 1999, a PIO who had acquired immovable property in India while he was a person resident in India may continue to hold such property.  Under the general permission available, you may transfer by way of sale or gift agricultural land/farmhouse in India to a person resident in India who is a citizen of India or to an NRI/PIO.  The sale proceeds may be credited to NRO account.