Realty fund flows into small town India boom
real estate demand across the country. Capital flows hit a record $1.3 billion, compared to $600 million in 2022, according to real estate consultancy CBRE.
While average annual inflow from 2019 to 2022 stood at $500 million, more than 85% of transactions in these cities were focused on development sites and the logistics sector.
According to CBRE, several cities such as Ahmedabad, Indore, Jaipur, and Coimbatore are also seeing robust private equity (PE) interest across sectors such as e-commerce, startups, banking, financial services and insurance (BFSI) — all of which can have a complementing impact on real estate investments.
From 2019 to 2023, Mumbai, Delhi-NCR, and Bengaluru remained the gateway markets for institutional investors, collectively attracting about 45% of the total capital deployed.
«This dominance remained consistent throughout the review period, with over 370 deals representing over 57% of the total activity recorded in these cities. Notably, these markets attracted a combined equity capital of $21 billion,» CBRE said in a report. This is attributed to the relatively larger presence of investment-grade projects, robust urban infrastructure, a diverse talent pool, strong tenant covenants, and overall market maturity in these cities.
While office sector investments remain concentrated in metro cities, capital inflows are increasingly targeting development across development sites, industrial & logistics (I&L), hospitality, residential, and retail sectors in tier-II and -III locations. This
