PE investments in residential realty up 104% on year, Mumbai most favoured

In 2024, investors from the UAE were the largest contributors, investing $1.7 billion, which accounted for 42% of total PE investments.

Private equity (PE) investment in Indian real estate has reached $ 4.2 billion in 2024, representing a 32% year-on-year (YoY) growth, according to a report by real estate consultancy firm KnightFrank India.  Among the various sectors, residential real estate has emerged as a standout performer, with a 104% surge in PE investments.

 

Notably, in 2024, PE investments more than doubled in the residential sector which saw a remarkable 104% increase in PE investments, amounting to $ 1.2 billion in 2024, demonstrating investor confidence in this segment which has been noting a consistent rise in end-user demand.

 

The report observed a significant change in investor focus and sectoral preferences, with the warehousing sector surpassing the office sector, which had held the highest share of PE investments since 2017, underscoring the growing importance of warehousing as a key driver of private equity inflows into the Indian real estate market.

 

Mumbai is the most favoured destination with 50% of total PE investments in the city, driven by large volumes of investment in warehousing in the city, PE investment landscape in 2024, attracting $2 Billion in 2024.  The warehousing sector dominated with 74% of the total PE investments in Mumbai, amounting to $ 1,537 million while the residential sector attracted US$406 million, making up 20% of the total PE investment in the city.

 

Bengaluru received total PE investments US$ 833 million in 2024. Around 52% of these investments, amounting to US$ 430 million, was towards the office sector, while the remaining 48% or US$ 403 million, was invested in the residential sector.

 

The National Capital Region (NCR) also saw significant investment, with US$ 202 million flowing into the residential sector. Other cities like Hyderabad, Pune, and Chennai also received their share of investments, further highlighting the nationwide potential of India's residential real estate market.

 

Unlike the previous year, where investments were primarily concentrated in completed properties, investors in 2024 focused heavily on under-construction projects. A significant portion of these investments were directed towards early-stage development. This trend suggests a more optimistic outlook, driven by India's expanding middle class, urbanisation, and improved economic stability.

 

While the residential sector has made strides, the warehousing sector emerged as the top performer in terms of overall investment, securing US$ 1.9 billion in 2024, a 136% YoY increase. The sector’s growth can be attributed to the booming e-commerce industry, which has driven demand for logistics and supply chain solutions. Mumbai and Chennai were the primary beneficiaries, with Mumbai alone attracting US$ 1.5 bn in warehousing investments. Other cities like Pune, which received US$ 52 mn, also contributed to this sector's expansion.

 

In 2024, investors from the UAE were the largest contributors, investing US$ 1.7 billion, which accounted for 42% of total PE investments. Indian investors followed closely with S$ 1.3 billion, making up 32% of the capital deployed. Singapore-based institutions also showed keen interest, investing approximately US$ 633.7 million in the Indian real estate sector.