Private equity (PE) investments in India’s real estate sector have surged significantly by 15% year-on-year, reaching a substantial $3 billion in the first half of 2024, up from $2.6 billion recorded in the same period last year, as per a recent report from Knight Frank India.
According to the data, the warehousing segment emerged as the leading recipient, capturing 52% of the total PE investments during January to June 2024. This was closely followed by the residential sector, which attracted 29% of the investments, and the office sector, which accounted for 20%. Investments in the residential sector experienced a remarkable upswing, soaring by over 209% to $854 million in the first half of 2024, compared to $277 million in the corresponding period of 2023. This surge underscores renewed investor confidence in the residential market driven by favorable economic conditions and robust consumer demand.
Spokesperson of Knight Frank India, attributed the buoyancy in the commercial real estate sector to factors such as the gradual return to offices, increasing absorption rates of office spaces, and strengthening rental values. Mumbai emerged as the top destination for PE investments in real estate, witnessing a significant rise from $1.24 billion in H1 2023 to $1.70 billion in H1 2024. Bengaluru followed closely, securing approximately 20% of the total PE investments with $581 million, showing its status as a key market for real estate investments in India. The report anticipates robust growth prospects for the Indian real estate market in the coming years, driven by sustained economic growth, increasing urbanization, and continued investor interest in both commercial and residential properties.
As the market continues to evolve its being keenly observing the sector’s resilience and adaptability amidst changing economic dynamics and regulatory landscapes. The surge in PE investments not only highlights confidence in India’s real estate fundamentals but also positions the sector for sustained growth and development in the foreseeable future.
