Indian Real Estate Attracts Record $8.87 Billion in Institutional Investments in 2024
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Loading... - Naveen Balani
- 18 Dec 2024
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According to a recent report by JLL India, institutional investment in Indian real estate surged by 51% in 2024, reaching a record $8.87 billion. This significant increase reflects investors' confidence in the robust demand for housing, office spaces, and warehousing properties across the country.
Key Highlights from the Report
i. Investment Growth: The total institutional investment in Indian real estate rose to $8.878 billion in 2024, compared to $5.878 billion in 2023. This marks the highest level of investment recorded, surpassing the previous peak of $8.4 billion in 2007.
ii. Foreign Investment Dominance: Foreign institutional investors contributed significantly, accounting for 63% of the total investments in the sector.
iii. Asset Class Performance: The residential segment attracted the largest share of inflows at 45%, followed by office buildings at 28% and warehousing properties at 23%. This distribution indicates a strong preference for residential investments amidst growing housing demand.
iv. Increased Deal Activity: The year 2024 witnessed a 47% increase in the number of deals, with a total of 78 transactions recorded, highlighting a vibrant investment landscape.
Lata Pillai, Senior Managing Director & Head of Capital Markets at JLL India, emphasized that India's strong economic growth, political stability, and diverse investment opportunities have positioned the country favorably in the global market. She noted a notable shift in the participation of domestic investors, who contributed 37% of the total investments in 2024, compared to an average of 19% from 2019 to 2022.
Pillai also pointed out the significant activity in Real Estate Investment Trusts (REITs), which saw investments reach nearly $800 million in 2024, marking a more than three-fold increase from the previous year. This surge indicates growing investor confidence in the REIT structure as a viable investment vehicle.
Looking ahead, Pillai mentioned that Qualified Institutional Placements (QIPs) are expected to play a crucial role in capital raising, particularly as the market anticipates an increase in newly listed players.
Despite the overall positive outlook, the report highlighted a downturn in office investments, which experienced a 17% decrease compared to 2023. This decline may reflect changing work patterns and the ongoing adjustments in the commercial real estate landscape post-pandemic.
The record institutional investments in Indian real estate in 2024 underscore the sector's resilience and attractiveness to both foreign and domestic investors. With a strong focus on residential and warehousing properties, the Indian real estate market is poised for continued growth, driven by favorable economic conditions and evolving investment strategies. As the sector adapts to new challenges, particularly in the office space, the overall outlook remains optimistic for the coming years.
