Institutional inflows in Indian real estate continue to remain healthy in 2024, indicating sustained investor confidence. Of the USD 4.7 billion real estate investments during the first nine months of 2024, office and Industrial & warehousing segment together accounted for over 70% share. After witnessing subdued activity in the previous few quarters, investments in office segment surged significantly in the third quarter predominantly driven by foreign investors. Foreign investors continued to dominate overall investments with a 69% share in the total inflows. Buoyed by domestic growth prospects and long-term returns, institutional investments are likely to be around USD 5-6 billion by the end of 2024.
Anshul Singhal, Managing Director, Welspun One said, “As we close the chapter on 2024, the Indian real estate sector finds itself at a crucial juncture.The year has witnessed remarkable growth across commercial, and industrial markets, displaying resilience despite global economic turbulence. Equity capital inflows soared to $8.9 billion in the first nine months, reflecting a 46% year-on-year increase. Domestic developers led the charge, contributing 65%, while foreign investors have added significant momentum to the market’s growth outlook. In the industrial real estate space, demand for Grade-A warehousing and logistics facilities has surged, not limited to strategic urban warehouses such as dark stores and micro-fulfillment centers but extends to the development of urban mixed-use distribution centers. However, meeting the evolving demand requires significant investment in infrastructure, including robust transportation networks, energy-efficient buildings, and digital connectivity to support these advanced facilities. The growing demand for these well-located facilities has led to a noticeable uptick in rental rates. This rental re-rating is expected to accelerate as demand for high-quality logistics infrastructure continues to exceed supply. Despite challenges such as inflation and rising construction costs, India remains an attractive investment destination due to its competitive cost structures and sustained demand for modern infrastructure. As disposable incomes rise and infrastructure development continues, the real estate sector is poised for sustained growth. With the government’s push for more Free Trade Agreements (FTAs), global companies are increasingly setting up manufacturing bases in India, positioning the country as a key player in the global market.”
Rajesh Jaggi, Vice Chairman Real Estate, Everstone Group expressed his views, “The cabinet’s approval of 12 new plug-and-play parks in 2024 under the National Industrial Corridor Development Programme (NICDP) marks a strategic leap forward and couldn’t have come at a better time. With advanced, state-of-the-art technologies now available, next-generation industrial parks, with manufacturing as a central focus, are set to become key drivers of economic growth. The share of sectors catering to manufacturing within the total warehousing demand has grown substantially, rising from 15% in 2019 to 24% in 2023, and most recently reaching 25% in H1 2024. These figures are poised to increase further in 2025, driven by the adoption of smart manufacturing technologies that will provide manufacturers with a significant competitive edge by enhancing productivity, efficiency, and adaptability”.
Nirav Kothary, Director Godwit Constructions added, “We are witnessing robust demand for manufacturing-first industrial spaces in key locations, advanced temperature-controlled storage facilities, and large-scale industrial parks with ready infrastructure tailored for occupiers and buyers. This growth is complemented by a steady influx of FDIs, strong interest from multinational developers, and increased investments from domestic funds, reinforcing the sector’s global and local relevance. With these drivers in place, 2024 has been a landmark year, paving the way for transformative opportunities in industrial real estate as India cements its position as a thriving economic hub.”
Venkatesh Gopalakrishnan, Director Group Promoter’s Office, MD - Shapoorji Pallonji Real Estate (SPRE) stated, “In 2024, the Indian real estate sector showcased remarkable resilience, supported by strong economic growth of 8.2%. Consumer confidence surged, driven by strong demand, diversified growth avenues, and evolving market dynamics, fostering optimism among investors. The year also saw significant advancements in technology and sustainability. AI-powered property management and digital platforms have made buying and selling homes more convenient and efficient. At the same time, eco-friendly building practices and green certifications are now essential to meet both consumer needs and regulatory standards. These trends, along with the growing demand for co-living spaces, highlight the sector’s adaptability to changing needs. As we look ahead to 2025, the focus will remain on integrating innovation, sustainability, and urban planning to meet the changing demands. While challenges like inflation and rising construction costs exist, opportunities abound with increasing urbanization, government support for affordable housing, growing demand for integrated townships, and the adoption of smart technologies. We anticipate continued strong demand for high-end, premium, and mid-segment categories.”
Concluding on a positive note, Badal Yagnik, Chief Executive Officer, Colliers India forecasted 2025 as another year, wherein multiple real estate classes will ride high on investor and end-user optimism. “While residential and office markets can potentially stabilize and continue to grow after consecutive peaks, industrial & warehousing demand can witness heightened traction. Notably, alternative asset classes such as data centers, co-living and senior housing are likely to witness accelerated growth, reflecting a broader and steady shift in demographics and consumer preferences.”
