T
he Indian real estate sector saw a record-breaking institutional investment of $8.878 billion in 2024, surpassing the previous year's figure by 51% and eclipsing the 2007 peak of $8.4 billion. This significant growth underscores growing confidence in the industry, positioning 2024 as a pivotal year for Indian real estate. The residential sector dominated investments, accounting for 45% of total inflows, followed by office buildings at 28%, and warehousing properties at 23%. Domestic investors favored residential properties, while foreign investors preferred office and warehousing assets.

    The residential sector saw a four-fold increase in investment from the previous year, with over $4 billion invested across 49 deals. This was largely driven by domestic investors, who gravitated towards residential properties. QIPs emerged as a dominant funding route for this sector, accounting for 57% of total investment volume. The shift in investment patterns highlights India's evolving real estate landscape and its ability to attract diverse capital despite global economic headwinds.

    Office investments declined by 17% compared to the previous year, with $2.5 billion invested across 18 deals. However, core assets remained a significant focus for investors, accounting for 61% of transactions. The residential investment landscape underwent a notable shift in 2024, with equity contributions surging to 54% of total sector investments. This substantial increase indicates growing investor confidence in the sector's potential for capital appreciation and higher returns.

    Foreign institutional investors continued to dominate the investment landscape, accounting for 63% share of total investments. Government efforts to enhance transparency and accountability have boosted investor confidence in recent years. Domestic domiciled investors also increased their participation, contributing 37% of total investments in 2024, up from an average of 19% between 2019-2022.

    The REITs sector saw a significant surge in activity, with investments reaching nearly $800 million in 2024, marking a more than three-fold increase from the previous year. Looking ahead, QIPs are expected to play a crucial role in capital raise as newly listed players enter the market.