Indian Real Estate Soars with Record $6.5 Billion Institutional Investments in 2024

Institutional investments in Indian real estate hit a five-year high of $6.5 billion in 2024, a 22% YoY growth. The industrial and warehousing sectors led, attracting $2.5 billion. Mumbai received the highest share, with international investors dominating inflows. Domestic investments accounted for 43% in Q4 2024.

Institutional investments in Indian real estate reached a remarkable five-year high of USD 6.5 billion in 2024, as reported by Colliers. This reflects a 22 percent year-on-year increase from USD 5.4 billion in 2023. Leading the charge was the industrial and warehousing sector, which drew USD 2.5 billion, soaring 190 percent from the previous year. Notably, this segment comprised 39 percent of the total inflows, surpassing the office segment that accumulated USD 2.3 billion or 36 percent.

The surge in investments was bolstered by robust manufacturing growth, enhancements in logistics infrastructure, and India's strategic positioning as a global manufacturing hub. Interestingly, foreign investors accounted for over 80 percent of the industrial and warehousing inflows. The residential sector also thrived, securing USD 1.1 billion, marking a 46 percent increase due to solid domestic demand.

Mixed-use assets witnessed an astounding 822 percent spike in inflows, reflecting shifting investment trends. Domestic investors were instrumental in 2024, comprising nearly one-third of the overall inflows, which surged by 27 percent year-on-year. A particularly strong fourth quarter saw investments total USD 1.9 billion, more than doubling Q4 2023 figures. Domestic investments accounted for 43 percent of this quarter's total, highlighting growing interest from Indian investors alongside steady foreign participation. Investors from the Asia-Pacific region represented nearly one-third of foreign inflows, emphasizing India's rising allure on the global stage.

Mumbai emerged as the top destination for real estate investments in 2024, capturing USD 1.6 billion or 24 percent of the total inflows. The office segment dominated Mumbai's investment landscape, making up 58 percent, followed by industrial and warehousing at 20 percent. Bengaluru, Chennai, and Delhi NCR also attracted substantial investments, each comprising 8-9 percent of total inflows. Furthermore, cities like Hyderabad, Pune, and Kolkata experienced solid year-on-year growth, particularly in industrial and warehousing sectors. Multi-city deals constituted 39 percent of total investments in 2024, indicating a balanced distribution of capital across India's prime real estate markets.

Badal Yagnik, CEO of Colliers India, highlighted that APAC investors contributed to nearly a third of the foreign inflows into India's real estate sector during the year. He projected that Tier-I cities would remain attractive for investors, bolstered by the government's focus on infrastructure and the 'Make in India' initiative. Vimal Nadar, Senior Director & Head of Research at Colliers India, emphasized that manufacturing expansion and robust consumption levels are poised to draw domestic and global investments into ready-to-use and developmental industrial assets.

(With inputs from agencies.)