The industrial and warehousing segment accounted for the highest share of 61 per cent of total investments in Indian real estate in the second quarter (Q2) of 2024, amounting to $1.5 billion, driven by select large deals in the segment, according to data from Colliers India, a real estate research and brokerage firm.

After a steady start in Q1 2024, Q2 2024 saw accelerated momentum, registering $2.5 billion of inflows in overall real estate—the highest in any quarter since 2021. This surge in industrial and warehousing investments resulted in a robust investment volume of $3.5 billion for the first half (H1) of 2024, compensating for the slow start in the first quarter. Foreign investments remained strong, constituting 81 per cent of the total inflows in Q2 2024, primarily led by investors from the US and UAE.

During Q2 2024, institutional investments in the industrial and warehousing segment rose significantly, increasing 11 times compared to Q2 2023, driven by several large deals. Amidst rising demand for superior quality grade A supply and evolving supply-chain models, investor confidence in the segment has significantly improved, as per Colliers India.

With healthy demand momentum, both global and domestic investors are expected to play a prominent role in consolidating industrial and warehousing assets in India. Amidst the significant growth in e-commerce and retail consumption in India, various asset-level investors are likely to enter the market, further boosting demand for AI-enabled warehouses and micro-fulfilment centres in the upcoming quarters.

Multi-city deals continued to dominate investment inflows, accounting for 72 per cent of the total during Q2 2024. Bengaluru and Delhi NCR together represented about 23 per cent of the total inflows during the quarter, driven by foreign investments.

Vimal Nadar, senior director and head of research, Colliers India, said: “Driven by foreign investments, the industrial and warehousing segment witnessed about half of the total inflows in the first half of 2024. Interestingly, institutional investments in the segment for H1 2024 is almost twice the inflows in the entirety of 2023. With India's manufacturing purchasing managers' (PMI) Index staying close to 60 in the last few months, investor confidence in the industrial and warehousing segment is likely to remain strong in throughout 2024.

“Furthermore, strategic infrastructure projects such as Dedicated Freight Corridors (DFCs) and Bharatmala and robust government policies such as National Logistics Policy, underscore substantial long-term growth opportunities for the industrial & warehousing segment in India.”

Fibre2Fashion News Desk (DP)