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Indian Real Estate PE Investments 2024: $4.15 Billion Surge Led by Warehousing
Team Finance Saathi
20/Dec/2024
What's Covered Under the Article
- Indian real estate PE investments grew by 32% in 2024, reaching $4.15 billion.
- Warehousing led with 45% of total investments, followed by residential and office sectors.
- UAE was the largest investor, with Mumbai emerging as the top destination.
In 2024, Indian real estate saw a significant increase in private equity (PE) investments, attracting US$ 4.15 billion (Rs. 35,300 crore), marking a 32% year-on-year growth. According to the latest Knight Frank India report, titled ‘Trends in Private Equity Investment in India 2024’, the surge in investments reflects the growing appeal of India’s real estate market, driven by sustained economic stability and investor confidence.
Warehousing sector leads the way
The warehousing sector emerged as the dominant recipient of PE investments, accounting for a substantial 45% of the total inflows. This sector benefited from the e-commerce boom and the expansion of logistics networks, particularly in light of the ongoing digital transformation across India. With an investment total of US$ 1,877 million (Rs. 15,966 crore), warehousing has proven its resilience as a key growth engine in the Indian commercial real estate landscape.
Residential sector growth
The residential sector saw a remarkable increase, with investments more than doubling to US$ 1,177 million (Rs. 10,012 crore). This rise is attributed to sustained demand from end-users and the increasing confidence in the sector, as real estate continues to be a preferred asset class for long-term investors. This growth highlights the shift towards quality housing and the middle-class expansion in India's key urban centers.
Office space investments
Despite a slight dip in the office sector, India’s commercial real estate market remains resilient. The office space segment attracted US$ 1,098 million (Rs. 9,340 crore) in PE investments, driven by factors such as the return to workplaces and strengthening rental values. While demand for office space has faced some challenges due to the hybrid work model, office properties in key cities like Mumbai have shown consistent growth.
Mumbai dominates PE inflows
Mumbai has emerged as the leading city for private equity investments in Indian real estate, capturing 50% of the total PE inflows in 2024. The city’s strategic location, coupled with its economic significance, continues to make it an attractive destination for global investors. The UAE has become the largest source of foreign capital, contributing US$ 1.7 billion (Rs. 14,460 crore) or 42% of the total PE investments in Indian real estate, followed by Indian investors, who deployed US$ 1.3 billion (Rs. 11,058 crore) in the sector. Singapore-based institutions also invested around US$ 633.7 million (Rs. 5,390 crore), reflecting the growing international interest in India's real estate market.
Looking forward
Shishir Baijal, Chairperson & Managing Director of Knight Frank India, highlighted that India’s economic stability and consistent growth in the real estate sector have played a significant role in driving private equity investments. He further emphasized that the warehousing sector, in particular, has benefited from the rapid growth of e-commerce and the expansion of businesses, making it a key driver of future investment in India’s real estate market.
Despite the challenges faced by the office sector, the overall outlook for commercial real estate in India remains positive, with strong fundamentals supporting long-term growth. As the economy continues to recover, the Indian real estate market is expected to attract more private equity investments, offering attractive opportunities for global investors.
In conclusion, 2024 marks a year of strong growth for Indian real estate, with significant investments in warehousing, residential, and office properties. The market continues to evolve, with Mumbai remaining a dominant investment hub. As global capital flows into India, the real estate sector's resilience and long-term potential are clear.
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