(Commonwealth) _ India has ranked fifth in cross-border real estate investments in the Asia-Pacific (APAC) region, attracting 9% of the total investment volume in the first half of 2024, according to a report by Knight Frank. Leading the region, Australia secured the highest share at 36%, followed by Japan at 23%. Out of the total cross-border investments of $11 billion in the APAC region during this period, India received a substantial $3 billion from global private equity investors. The Indian office sector emerged as a key area of interest, accounting for 36% of the total global capital allocation. This strong appeal of commercial real estate assets underscores the sector’s robust performance and attractiveness to investors. Following closely, the industrial sector captured 30% of the investment share. The residential sector attracted 15% of the investments, while the retail sector accounted for 10%, as noted in the Knight Frank report.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, highlighted the potential for increased foreign private equity investments in the second half of the year. He attributed this optimism to the anticipated recovery of global economies and the strength of India’s domestic macroeconomic conditions. “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,” Baijal stated.
Meanwhile, the Chinese property market continues to struggle, still reeling from a significant crisis. China received only a tenth of the total cross-border investment flows to the region during this period, indicating a slow recovery. Projections indicate that cross-border investments in APAC real estate are set to rise by a third in the second half of 2024. The office sector is expected to maintain its attractiveness, drawing 30% of the cross-border investments in 2024, followed by the logistics sector at 29%. This trend reflects the growing importance of these sectors within the regional real estate landscape.
Australia, a key gateway market, is poised to receive the highest volume of cross-border investments in the second half of 2024. Projections show an expected 129% increase from the previous year, underscoring Australia’s strong market position. For the entirety of 2024, Australia, Japan, and Singapore are anticipated to be the top three destinations for cross-border real estate investments.
Christine Li, Head of Research at Knight Frank Asia-Pacific, provided a historical perspective on the current market dynamics. She noted that past crises, including the global financial crisis, the Chinese economic slowdown, and the COVID-19 pandemic, have demonstrated a pattern of transaction volume normalization within 30 months. “Historical analyses of previous crises, including the global financial crisis, the Chinese economic slowdown, and the Covid-19 pandemic, demonstrate that transaction volumes in the region typically normalize within 30 months,” Li said. Li pointed out that the APAC region is currently in the 24th month of a high interest-rate-induced downturn. This timeline suggests that the second half of the year presents a prime investment window for acquiring undervalued assets, as market conditions are likely to stabilize and improve.
India’s significant share of cross-border real estate investments highlights its growing appeal to global investors, particularly in the commercial and industrial sectors. The expected economic recovery in the latter half of the year, coupled with the historical resilience of the APAC real estate market, presents a favorable outlook for increased investment activities. Australia’s anticipated surge in investment volumes further underscores the region’s robust potential, making it an attractive destination for international real estate investors. The collective insights from the Knight Frank report paint a promising picture for the APAC real estate market, with strategic opportunities poised to emerge as the region navigates through the current economic landscape.
