Private Equity Investment in India's Real Estate Sector Soars to $3.9 Billion in 2024
Private equity (PE) investments in India's real estate sector reached $2.2 billion (approximately ₹18,600 crore) in the third quarter of 2024 (July-September), reflecting an impressive 93% increase from the previous quarter and more than doubling the investment volume from the same period last year, according to a report by Savills India.
From January to September 2024, total PE inflows amounted to $3.9 billion (around ₹32,900 crore), surpassing the entire investment volume for the year 2023.
The report indicates that the industrial and logistics segment led the way, attracting $1.7 billion (about ₹14,400 crore), which constitutes 77% of the total investment. This growth is driven by increasing demand from e-commerce companies and government efforts to position India as a manufacturing hub.
The commercial office sector ranked second, accounting for 21% of overall PE investments, all of which came from foreign investors targeting key assets in cities like Chennai, Mumbai, and the NCR.
Arvind Nandan, Managing Director of Research & Consulting at Savills India, noted that despite global challenges, India has experienced a surge in investment activity, with year-to-date 2024 inflows exceeding all investments from 2023. This trend reflects strong investor confidence amid a robust macroeconomic environment. The industrial and logistics segments are leading in quarterly investments, as diversification strategies gain importance.
Colliers India reported that institutional investments in the real estate sector reached $4.7 billion during the first three quarters of 2024, nearly matching the corresponding period in 2023. After significant inflows in the first two quarters, Q3 2024 also saw a healthy investment of about $1.1 billion, marking a 45% year-on-year growth. The office segment comprised 54% of total investments, while residential accounted for 33%, primarily driven by domestic capital. Domestic investments amounted to $0.5 billion, making up 44% of total inflows during the quarter.
Piyush Gupta, Managing Director of Capital Markets & Investment Services at Colliers India, emphasized that institutional flows in Indian real estate remain strong, reflecting ongoing investor confidence. The investment landscape is diversifying, with both global and domestic capital involved. While office assets continue to be a focal point, the industrial and warehousing, as well as residential segments, are gaining traction.
Emerging themes such as fractional ownership in office and warehousing, partnerships with residential developers, flexible credit options, and hospitality are creating new opportunities for investors. Of the total $4.7 billion in institutional inflows during the first nine months of 2024, over 60% was directed towards industrial, warehousing, and residential assets. With this ongoing momentum, 2024 is expected to close on a high note, likely exceeding the investment volumes of 2023.
According to NAREDCO Maharashtra, India’s real estate sector is the second-largest employer after agriculture, and its remarkable growth rate of 18.7% compound annual growth rate (CAGR) is creating ample employment opportunities. It is poised to become the largest job-generating sector and a hub for young talent in the near future.
