India's Real Estate Boom: Record Investments and Expanding Horizons

India's real estate market experienced unprecedented growth in 2024, with equity inflows hitting $8.9 billion, fueled by global interest in tier-II and III cities. Major investments focus on land development and offices, while innovative infrastructure and rising incomes boost tier-II cities. Sustainability and tech advancements are key to future growth.

India's real estate sector has witnessed a historic surge, with equity inflows reaching an unprecedented $8.9 billion in the first nine months of 2024, marking a 46% increase compared to the previous year, as per a CBRE report. Forecasts suggest equity investments could soar to $10-11 billion by the end of the year, driven by heightened interest in tier-II and tier-III cities. Delhi-NCR led the way, attracting 26% of total investments, followed closely by Mumbai and Bengaluru.

The lion's share of investments - around 70% - targeted land development and office spaces, with residential projects accounting for 64% of land-related inflows. Foreign investors, predominantly from North America and Singapore, contributed $3.1 billion, reaffirming India's global allure. The industrial and logistics sector saw robust leasing activity, reaching 27.5 million square feet, with Delhi-NCR, Kolkata, and Bengaluru contributing 61% of the total demand.

The third-party logistics sector dominated the market, while the engineering, manufacturing, and retail sectors diversified demand. Emerging tier-II cities like Chandigarh, Hosur, and Jaipur gained momentum, thanks to enhanced infrastructure and increasing disposable incomes. Warehousing rents rose by 2-14% year-on-year due to improved facilities and rising land costs. Retail leasing saw 4.5 million square feet activity, with the fashion and apparel sector accounting for 38% of this demand, according to Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.

The office real estate sphere achieved record heights with leasing activities reaching 53.3 million square feet from January to September 2024. Bengaluru, Hyderabad, and Pune dominated new office space expansions, contributing 66% of the completed 36.2 million square feet. Global capability centers led 38% of leasing activity, while domestic enterprises accounted for 42%, highlighting India's balanced appeal to global and local businesses.

With robust demand across office, residential, industrial, and retail sectors, India's real estate market is charting a strong growth trajectory. Industry leaders predict that sustainability, technological innovation, and expansion into tier-II and III cities will shape this dynamic field's future.

(With inputs from agencies.)