In 2024, institutional investments in Indian real estate reached a record $8.87 billion, reflecting a substantial rise of 51 per cent compared to the previous year.
This surge in investment highlights the growing appeal of India’s real estate sector, driven by strong demand for housing, office spaces, and warehousing properties.
According to a report released by JLL India, the total institutional investment in Indian real estate has increased from $5.87 billion in 2023 to $8.87 billion in 2024.
Foreign institutional investors (FIIs) have played a significant role in this growth, accounting for 63 per cent of the total investment in the sector.
The residential segment, in particular, has been a major beneficiary, attracting 45 per cent of the inflows. Office buildings followed with 28 per cent of the investment, while warehousing properties received 23 per cent of the total institutional capital.
This record-breaking figure of $8.87 billion marks a significant milestone for the Indian real estate sector, surpassing the previous peak of $8.4 billion in 2007.
The report from JLL India notes that the surge in institutional investment is not only due to the robust demand across various asset classes but also a marked increase in the number of deals. In 2024, the number of transactions grew by 47 per cent, reflecting a surge in investor confidence and interest in the sector.
Lata Pillai, Senior Managing Director and Head of Capital Markets at JLL India, highlighted that India's favourable economic conditions, including strong growth and political stability, have positioned the country as an attractive investment destination.
She also noted that there has been a significant shift in the composition of investors, with a growing share of domestic investors. In 2024, domestic investors contributed 37 per cent of the total investment, compared to an average of 19 per cent from 2019 to 2022.
This indicates a shift in investor sentiment, with more capital being raised from within India itself.
Pillai also pointed out the growing importance of Real Estate Investment Trusts (REITs) in India’s real estate landscape. REITs have seen a substantial surge in activity, with investments in 2024 reaching nearly $800 million—more than three times the investment level seen in 2023.
This growth is a testament to the increasing acceptance of REITs as a viable investment option, offering more liquidity and easier access to the real estate market for institutional investors.
Looking forward, JLL India predicts that Qualified Institutional Placements (QIPs) will play a crucial role in raising capital, as the market is expected to see an increase in newly listed players.
This reflects the ongoing evolution of the Indian real estate market, where innovative funding methods are gaining traction.
The residential sector remains the focal point of investor interest, attracting a significant share of the capital. In contrast, investments in office properties have experienced a decline in 2024, with a 17 per cent decrease compared to 2023.
This downturn in office investments suggests a shift in demand, possibly due to changes in work patterns following the pandemic and the rise of hybrid working models.
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