2024 PE Investments in Indian Real Estate Up 10% to $4.3 billion

December 24, 2024 : Private equity investments inflows into the Indian real estate sector stood at $4.3 billion during 2024, reflecting a 10 per cent year-on-year increase. According to the latest data by Savills India, a global property consulting firm, foreign institutional investors accounted for 88 per cent of the investment activity in 2024.

Despite geopolitical challenges, high global inflation and economic recessionary concerns, private equity investments maintained the momentum, offering favourable opportunities for both global and domestic institutional investors. Driven by India’s strong economic growth, 2024 witnessed a steady resurgence in investor confidence in the Indian real estate market.

The industrial and logistics sector emerged as the top destination for private equity inflows, attracting $2.3 billion and accounting for over half the total investments. While the office sector saw a decline in its share, it remained resilient, supported by the gradual return to workplaces and increasing office space absorption. The residential sector also gained traction, driven by rising demand for premium housing, while alternative sectors like data centres and life sciences are poised for growth.

Savills India projects private equity investments in real estate to reach between $4.5 billion and $5 billion in 2025. Amidst limited investible grade assets, the office segment might see muted investments, while alternative sectors like life sciences and data centres are poised for prominence. The industrial and logistics sector is expected to remain a key focus area as India strengthens its position as a global logistics hub. The rise of Alternative Investment Funds (AIFs) is likely to bring a structural shift in the investment landscape, with emerging sectors gaining prominence.

Commenting on the trends, Arvind Nandan, Managing Director, Research & Consulting, Savills India, said, “Private equity investments in Indian real estate have shown remarkable resilience amid global uncertainties, reflecting a strategic shift towards diversification. The recent trends indicate India’s growing role as a supply chain hub, positioning the industrial and logistics sector at the forefront of PE inflows. While the commercial office segment continues to attract steady interest, the rise in demand for premium housing has also positioned the residential sector as a key investment avenue. Looking ahead, we expect sustained growth in private equity inflows, with foreign institutional investors playing a dominant role. The growing adoption of REITs will also play a key role in shaping the future of the real estate investment landscape.”

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