New Delhi [India], December 29 : Private equity investment inflows into the Indian real estate sector stood at USD 4.3 billion (Rs 356 billion approximately) during 2024, reflecting a 10 per cent increase year-on-year.
According to the latest data by Savills India, a global property consulting firm, foreign institutional investors (FIIs) accounted for 88 per cent of the total investment activity in 2024, reinforcing their dominant role in driving growth in the sector.
Despite geopolitical challenges, high global inflation and economic recessionary concerns, private equity investments maintained the momentum, offering favourable opportunities for both global and domestic institutional investors.
Driven by India's strong economic growth, 2024 witnessed a steady resurgence in investor confidence in the Indian real estate market.
According to the real estate consulting firm, the industrial and logistics sector emerged as the top destination for private equity inflows, attracting USD 2.3 billion (Rs 194 billion approximately) and accounting for 54 per cent of the total investments.
While the office sector's share declined, it remained resilient, supported by the gradual return to workplaces and increasing office space absorption.
The residential sector also gained traction, driven by rising demand for premium housing, while alternative sectors like data centres and life sciences are poised for growth.
Savills India projects private equity investments in real estate to reach USD 4.5 billion to USD 5.0 billion in 2025.
"Amidst limited investible grade assets, the office segment might see muted investments, while alternative sectors like life sciences and data centres are poised for prominence," Savills India said in a statement.
The industrial and logistics sector is expected to remain a key focus area as India strengthens its position as a global logistics hub.
Arvind Nandan, Managing Director, of Research and Consulting, Savills India, said, "Private equity investments in Indian real estate have shown remarkable resilience amid global uncertainties, reflecting a strategic shift towards diversification. The recent trends indicate India's growing role as a supply chain hub, positioning the industrial and logistics sector at the forefront of PE inflows."
"While the commercial office segment continues to attract steady interest, the rise in demand for premium housing has also positioned the residential sector as a key investment avenue. Looking ahead, we expect sustained growth in private equity inflows, with foreign institutional investors playing a dominant role," said Arvind Nandan.
Savills India is a group company of Savills Plc. with offices in Bengaluru, Mumbai, Delhi NCR, Chennai, Pune, Hyderabad, Ahmedabad and Kolkata.