Institutional investments in Indian real estate crossed $6.5 billion inflows in 2024, marking a significant 22% increase from the previous year’s $5.4 billion, according to a January 6 report by Colliers India.
The industrial and warehousing segment attracted $2.5 billion in investments, accounting for 39% of the total inflows, and was closely followed by the office segment at 36% share.
The report added that in 2024, the Industrial and warehousing segment accounted for the highest share of overall real estate investment volumes at 39%, surpassing the office segment.
Manufacturing and industrial growth in the country were robust throughout 2024, as reflected in the performance of macroeconomic indicators such as the Manufacturing Purchasing Managerโs Index (PMI) and the Index of Industrial Production (IIP).
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At $1.1 billion, the residential segment also witnessed substantial growth, rising 46% compared to 2023 levels. Overall, at $4.3 billion, foreign inflows continued to drive annual real estate investments at a 66% share, while domestic investments also witnessed a steady rise, surging 27% YoY during the year.
The fourth quarter of 2024 was particularly robust, with investments totalling $1.9 billionโ2.3X times the same period in 2023. Interestingly, domestic investments were significant in Q4 2024 and accounted for 43% of the inflows during the final quarter. The report said this underscores the growing confidence of India-based institutional investors alongside sustained interest from international counterparts.
โPrivate equity investments in Indian real estate have witnessed strong momentum in 2024, buoyed by robust domestic growth and sustained investor confidence. With a record $6.5 billion inflows in 2024, Indian realty investments have been the highest since 2020. Interestingly, APAC investors drove almost one-third of the foreign inflows in the countryโs real estate during the year,โ Badal Yagnik, Chief Executive Officer, Colliers India, said.
Looking ahead he added that Tier-I cities will continue to attract most of the capital amidst government impetus on infrastructure development and the โMake in Indiaโ initiative. While global investorsโ confidence will likely remain upbeat, 2025 will likely see increased capital deployment from domestic players across office, residential and industrial assets.
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Mumbai drove annual inflows with a 58% share in office assets
The report added that while multi-city deals corresponded to an overall 39% share, Mumbai, with about $1.6 billion inflows, accounted for 24% of the real estate investments in the country during 2024.
At 58%, the office segment attracted the majority of the city’s annual inflows on investment in select developmental assets. This was followed by industrial and warehousing assets, which accounted for 20% of the real estate investments in Mumbai in 2024. Investment inflows in Bengaluru, Chennai and Delhi NCR also remained steady and accounted for an 8-9% share each during the year.
โThe year 2024 was a watershed year for real estate investments in India, wherein industrial and warehousing asset inflows surpassed annual investments in the office segment. With $2.5 billion inflows, large-sized deals drove industrial and warehousing investments in 2024,โ Vimal Nadar, Senior Director and Head of Research at Colliers India, said.
Rising demand for superior quality Grade A developments and evolving supply-chain models will continue to incentivise investors in consolidating industrial and warehousing assets in the country, he added. Furthermore, manufacturing scale-up and healthy consumption levels are likely to attract domestic and global investments in both ready-to-use and developmental industrial assets, going ahead.
