India has secured its position as the fifth-largest destination for cross-border real estate investments within the Asia-Pacific (APAC) region, according to the latest Knight Frank report, Asia Pacific Horizon: Look Beyond the Norms. In the first half of 2024, India attracted $3 billion, representing 9% of the total $11.5 billion in cross-border investments across the APAC region.
The report highlights that the office sector in India remains a magnet for global investors, capturing 36% of the total investment share. This underscores the sector’s strong appeal due to its stable returns and robust demand. The industrial sector follows closely, drawing 30% of the investment, while residential and retail sectors garnered 15% and 10% respectively.
Knight Frank India notes that the anticipated rebound in global economies in the latter half of 2024 is expected to further stimulate foreign private equity investments. This influx is projected to enhance the performance of the Indian real estate market and sustain the growth trajectory of industry assets. The impact of cross-border capital flows is notably influential in the APAC commercial real estate market, with forecasts suggesting a potential increase of over 33% in cross-border investments in the second half of 2024 compared to the same period in 2023.
Additionally, a separate Knight Frank report reveals that Delhi-NCR is now the fifth most expensive office space rental market in the APAC region. With a prime office rent of ₹340 per square foot per month, Delhi-NCR has consistently maintained its rental values over the past six quarters. In contrast, Mumbai’s prime office rents stand at ₹302 per square foot per month, placing it eighth in the APAC rankings. Despite significant growth in Mumbai’s office leasing market, with a year-on-year increase of 183.1% and approximately 3 million square feet leased, rental rates have remained stable.
Bengaluru, India’s IT hub, ranks 18th among the most affordable prime office markets in the APAC region. The city’s prime office rent is ₹137 per square foot per month, reflecting a modest 1.3% year-on-year increase. Bengaluru has also led in leasing activity, with 4.9 million square feet leased in Q2 2024, benefiting from increased office occupancy and positive market conditions. Overall, the Indian office market has seen a 50% increase in transaction activities across key markets, including Delhi NCR, Mumbai, and Bengaluru, with prime rental rates remaining stable between April and June 2024.
