January 6, 2025
Institutional investments in Indian real estate reached US$6.5 billion in 2024, a 22% increase from 2023 and the highest since 2020.
Inflows in the fourth quarter of 2024 were US$1.9 billion, 2.3 times higher than in Q4 2023, with domestic investors contributing 43%
Industrial & Warehousing saw an increase of 190% YoY (39% of total inflows)
Foreign investors contributed US$4.3 billion, accounting for 66% of total inflows, while domestic investments rose 27% year over year
Institutional investments in Indian real estate surged to US$6.5 billion in 2024, reflecting a robust 22% growth compared to 2023, according to a report by Colliers. This marked the highest investment volume in the sector since 2020, driven by domestic and foreign players.
The final quarter of 2024 played a pivotal role in this growth, contributing US$1.9 billion—2.3 times more than the same period in 2023. Notably, domestic investments formed 43% of Q4 inflows, highlighting India-based institutional investors’ growing confidence and sustained interest from international counterparts.
Sectoral Trends
The industrial and warehousing sector emerged as the top-performing asset class, attracting US$2.5 billion in investments—a staggering 190% increase from 2023—accounting for 39% of total inflows. This surge reflects rising demand for Grade A developments and enhanced logistics infrastructure bolstered by large-scale transactions.
The residential sector also witnessed impressive growth, with investments reaching US$1.1 billion, a 46% increase from 2023. However, the office segment saw a 23% decline, recording US$2.3 billion in inflows. Alternate assets, including data centres and senior housing, experienced a sharp 94% drop, attracting only US$39.5 million.
City-Wise Distribution
Mumbai retained its position as the top investment destination, securing US$1.6 billion or 24% of total inflows. The city saw significant investments in the office segment, followed by industrial and warehousing assets. Bengaluru, Chennai, and Delhi NCR collectively held an 8-9% share each, demonstrating steady contributions to the overall market.
Foreign vs. Domestic Investments
Foreign investors continued to dominate, contributing US$4.3 billion or 66% of total inflows. Notably, APAC investors accounted for nearly one-third of foreign investments. Meanwhile, domestic investments grew 27% year-on-year, with increased capital deployment in residential, office, and industrial segments.
Outlook for 2025
“With a record US$6.5 billion inflows in 2024, Indian realty investments have been the highest since 2020,” said Badal Yagnik, CEO, Colliers India. “Tier-I cities will continue to attract the majority of capital, driven by government initiatives like ‘Make in India’ and infrastructure development. While global investors remain confident, 2025 will likely see increased participation from domestic players across office, residential, and industrial assets.”
The report underscores the evolving dynamics of the Indian real estate market, with industrial and warehousing leading the charge and domestic investors playing a more prominent role in shaping the sector’s future.
Source: Business Standard