In the first half of 2024, the Indian real estate sector saw a substantial influx of private equity (PE) investments amounting to $3 billion (approximately Rs 25,000 crore), marking a notable 15% increase from the previous year’s $2.6 billion. According to a recent report by Knight Frank India, the warehousing sector emerged as the frontrunner, capturing 52% of the total PE investments, followed by residential (29%) and office (20%) segments.
The report highlights a significant shift in investor preferences, with the residential sector experiencing a remarkable surge of over 209%, attracting $854 million compared to $277 million in the same period last year. This surge underscores growing investor confidence in India’s residential market amid evolving economic conditions.
Mumbai stood out as the epicenter of PE investments, witnessing a substantial rise from $1,242 million in H1 2023 to $1,701 million in H1 2024. The warehousing sector dominated Mumbai’s investment landscape, comprising 88% of total PE investments, while residential real estate also saw a substantial influx of $201 million.
Bengaluru, another key market, received around 20% of total PE investments, amounting to $581 million, with a significant portion directed towards the residential sector ($403 million) and the remaining towards office spaces ($178 million).
The warehousing segment saw an unprecedented surge nationally, reaching $1,532 million in H1 2024, marking a substantial 176% increase from $555 million in the previous year. Major cities like Mumbai and Chennai emerged as top destinations for warehousing investments, attracting $1,500 million and $32.3 million, respectively.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented on the investment trends, noting that despite global economic uncertainties, India’s commercial real estate sector remains robust. Factors such as increasing office absorption rates, strengthening rental values, and a recovery in the residential and retail markets have continued to attract long-term investments.
Looking ahead, Baijal expressed optimism about potential easing of global economic conditions, which could further bolster investment activity from global players in India’s real estate sector, leveraging the country’s growth trajectory and investment-friendly policies.