Institutional inflows into Indian realty highest in 5 years at $6.5 billion

Mumbai attracted majority of the inflows with 24% share in 2024

Institutional investments inflows into Indian real estate touched $6.5 billion in 2024, marking a substantial 22% increase from the previous year's $ 5.4 billion, marking an annual high for both domestic and foreign investments since 2020, said real estate consultancy firm Colliers in a report. 

 

The surge in investment activity is particularly notable in the fourth quarter of 2024, which saw inflows totaling $ 1.9 billion- 2.3 times more than the same period in 2023. This momentum in Q4 significantly contributed to the annual growth in investment volumes. Interestingly, domestic investments were significant in Q4 2024 and accounted for 43% of the inflows during the final quarter. This underscores the growing confidence of India-based institutional investors alongside sustained interest from international counterparts.

 

In 2024, the Industrial & warehousing segment accounted for the highest share in overall real estate investment volumes at 39%, surpassing the office segment. 

 

Manufacturing and industrial growth in the country was robust throughout 2024 and was reflected in the performance of macro-economic indicators such as Manufacturing Purchasing Manager’s Index (PMI) and Index of Industrial Production (IIP). At USD 1.1 billion, residential segment too witnessed substantial growth, rising 46% compared to 2023 levels. 

 

Overall, at $ 4.3 billion, foreign inflows continued to drive annual real estate investments at 66% share, while domestic investments too witnessed a steady rise, surging 27% YoY during the year.

 

“With a record $ 6.5 billion inflows in 2024, Indian realty investments have been the highest since 2020. Interestingly, APAC investors drove almost one-third of the foreign inflows in the country’s real estate during the year. Looking ahead, Tier-I cities will continue to attract majority of the capital, amidst government impetus on infrastructure development and ‘Make in India’ initiative. While global investors’ confidence is likely to remain upbeat, 2025 is likely to see increased capital deployment from domestic players across office, residential and industrial assets,” said Badal Yagnik, Chief Executive Officer, Colliers India.

 

Investment Trends

The investment inflows by asset class illustrate shifting dynamics:

 

• Industrial & Warehousing: $ 2.5 billion (39% of total inflows, up 190% YoY)
• Office: $2.3 billion (36% share, down 23% YoY)
• Residential: $1.1 billion (17% share, up 46% YoY)
• Alternate Assets: $39.5 million (down 94% YoY)

*Note: Alternate assets include data centers, life sciences, senior housing, holiday homes, student housing, schools etc.

 

The industrial and warehousing segment’s inflows have nearly tripled since 2023, demonstrating a growing demand for quality Grade A developments and improved logistics efficiency. Large-scale deals significantly drove investments in this category, indicating a shift towards consolidating industrial and warehousing assets in the country.

 

City-wise Investment Highlights

Mumbai remained a key player, accounting for 24% of the total real estate investments in 2024, with $1.6 billion inflows. The office segment attracted the majority of investments in the city, while industrial and warehousing assets followed closely. Other cities such as Bengaluru, Chennai, and Delhi NCR also contributed steadily, each holding around 8-9% of the market share.