Private Equity Investments in Indian Real Estate Rise 32% in 2024; Residential Sector Shines
Private equity (PE) investments in Indian real estate have experienced a remarkable surge in 2024, with total investments reaching $4.2 billion, marking a 32% year-on-year (YoY) growth. According to a recent report by KnightFrank India, the residential real estate sector has emerged as a major driver of this growth, witnessing a stunning 104% increase in PE investments, totaling $1.2 billion. This surge highlights the strong demand from end-users and growing investor confidence in India’s housing market.
Mumbai continues to dominate as the most favoured destination for PE investments, accounting for 50% of the total inflows in 2024. A significant portion of this investment is in the warehousing sector, which has seen a dramatic rise due to the booming e-commerce industry. In Mumbai, warehousing captured 74% of PE investments, amounting to $1.54 billion. The residential sector in Mumbai also witnessed strong investment, receiving $406 million. Other major cities, including Bengaluru and the National Capital Region (NCR), also saw substantial inflows. Bengaluru received $833 million in PE investments, with nearly half directed towards the residential sector. NCR attracted $202 million in residential investments, further showcasing the nationwide appeal of India’s real estate market. Additionally, cities like Pune, Chennai, and Hyderabad contributed to the growth of the residential sector.
Interestingly, 2024 marks a shift in investment trends, with more focus on under-construction projects compared to completed properties in previous years. This shift reflects the growing optimism surrounding India’s expanding middle class, urbanisation, and economic stability. Investors are now more willing to take risks on early-stage developments, anticipating long-term growth. While the residential sector has performed well, the warehousing sector remains the top performer overall. It attracted a remarkable $1.9 billion in PE investments, a 136% YoY increase, driven by the surge in demand for logistics and supply chain solutions. The UAE emerged as the largest investor, contributing 42% of total PE investments, followed by Indian investors at 32% and Singapore-based institutions, which invested around $633.7 million. This substantial growth in PE investments signals a positive outlook for India’s real estate sector, with strong potential for continued growth in both residential and warehousing segments.
