The latest report from Knight Frank India, “Trends in Private Equity Investment in India: H1 2024,” reveals that private equity (PE) investments in Indian real estate totalled $3 billion in the first half of 2024, marking a 15% year-on-year increase from $2.6 billion in H1 2023. The warehousing sector accounted for the largest share of these investments, comprising 52% of the total, followed by the residential sector at 29% and the office sector at 20%.
The warehousing sector’s dominance marks a significant shift in investor dynamics and preferences within the Indian real estate market. Traditionally, the office sector had been the primary recipient of PE investments since 2018. However, in a notable development, the warehousing sector has now eclipsed the office sector, attracting more investment than the combined totals of the office, retail, and residential sectors. This change highlights the growing appeal of warehousing as a lucrative investment opportunity, driven by increasing demand for logistics and storage infrastructure. The residential sector also experienced a substantial increase in PE investments, surging by over 209% to $854 million in H1 2024, up from $277 million in H1 2023. This significant growth underscores a renewed investor interest in residential properties, likely spurred by rising urbanisation and demand for quality housing.
Mumbai emerged as the leading destination for PE investments, with the city witnessing an increase in inflows from $1,242 million in H1 2023 to $1,701 million in H1 2024. The warehousing sector accounted for 88% of Mumbai’s total PE investments, amounting to $1,500 million, while the residential sector contributed 12%, or $201 million. Bengaluru also attracted significant PE investments, accounting for approximately 20% of the total, totalling $581 million in H1 2024. Of these, 69%, or $403 million, were directed towards the residential sector, with the remaining 31%, or $178 million, invested in the office sector. The shifting investment landscape, with the warehousing sector now at the forefront, reflects evolving market dynamics and investor confidence in the growth potential of India’s logistics and storage infrastructure. This trend is expected to continue, with increased private equity inflows further bolstering the sector’s development and expansion.
