Private equity (PE) investments in Indian real estate reached USD 4.2 billion in 2024, a 32% rise from the previous year, driven by warehousing and residential sectors. Warehousing led with USD 1.9 billion (45% of total), a 136% increase, fueled by e-commerce growth. Residential investments doubled to USD 1.2 billion, showing a 104% rise due to recovering housing demand. Mumbai attracted 50% of PE inflows, with USD 2 billion largely in warehousing. The UAE emerged as the top foreign investor, contributing USD 1.7 billion. Despite a 38% drop in office sector investments, the market shows strong potential across key segments and regions.
Private equity (PE) investments in Indian real estate reached USD 4.2 billion in 2024, marking a 32% increase compared to the previous year. This growth highlights a significant shift in investor interest, particularly in the warehousing and residential sectors. According to a recent report by Knight Frank India, the warehousing sector led the charge, accounting for 45% of total investments, while residential and office sectors contributed 28% and 26%, respectively.
One of the most notable trends is the doubling of investments in the residential sector, which saw a remarkable 104% increase to USD 1.2 billion in 2024. This surge indicates growing confidence among investors, driven by rising end-user demand and a recovering housing market. The report suggests that investor focus is shifting toward under-construction projects, reflecting a more diversified approach compared to previous years.
The warehousing sector has also experienced significant growth, with investments soaring to USD 1.9 billion in 2024, a staggering 136% increase from the USD 684 million recorded in 2023. This surge can be attributed to the booming e-commerce industry and the increasing need for efficient logistics and supply chain solutions. Cities like Mumbai and Chennai are at the forefront of this growth, attracting USD 1.5 billion and USD 288 million, respectively. The demand for warehousing is driven by rising consumerism and supportive government policies aimed at enhancing infrastructure.
Mumbai remains the top destination for PE investments, capturing 50% of the total inflow, primarily due to substantial investments in warehousing. The city received USD 2 billion in total PE investments in 2024, with the warehousing sector alone accounting for USD 1.5 billion. Bengaluru followed with USD 833 million in investments, where the office sector attracted 52% of the total, reflecting the city's strong economic growth and status as a business hub.
International investment flows into Indian real estate are also noteworthy. In 2024, the UAE emerged as the largest source of foreign capital, contributing USD 1.7 billion, which represents 42% of total investments. Indian investors followed closely, investing USD 1.3 billion, while Singapore-based institutions contributed approximately USD 634 million. This diverse investment landscape underscores the growing global interest in India's real estate market.
While the office sector faced challenges, attracting USD 1.1 billion in investments a 38% decline from the previous year there remains strong demand for high-quality office spaces, particularly in key markets like Bengaluru and Hyderabad. These cities continue to attract significant PE interest due to their robust economic conditions and expanding business environments.
Overall, the trends observed in 2024 suggest a promising outlook for the Indian real estate market. The warehousing sector is positioned as a key player, while the residential market benefits from increased domestic investor participation. With strong economic fundamentals, urbanization, and government support, the future of Indian real estate appears bright, despite some challenges in the office segment. Investors are likely to continue exploring opportunities across various sectors, aiming to capitalize on India's evolving real estate landscape.
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