Indian realty sector sees 22% growth at $6.5 billion in 2024, foreign inflows surge

Led by the industrial and warehousing segment, the institutional investments in Indian real estate touched $6.5 billion inflows in 2024, a substantial 22 per cent increase from the previous year's $5.4 billion, according to a report on Monday.

Overall, at $4.3 billion, foreign inflows continued to drive annual real estate investments at 66 per cent share, while domestic investments too witnessed a steady rise, surging 27 per cent during the year, according to the report by Colliers India.

Mumbai, with about $1.6 billion inflows, accounted for 24 per cent of the real estate investments in the country last year. Investment inflows in Bengaluru, Chennai and Delhi NCR also remained steady and accounted for 8-9 per cent share each during the year.

The fourth quarter of 2024 was particularly robust, with investments reaching $1.9 billion — a 2.3 times increase compared to the same period in 2023.

Notably, domestic investments were significant in Q4 2024 and accounted for 43 per cent of the inflows during the final quarter.

The industrial and warehousing segment accounted for the highest share in overall real estate investment volumes at 39 per cent last year, surpassing the office segment.

Manufacturing and industrial growth was robust 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 $1.1 billion, residential segment too witnessed substantial growth, rising 46 per cent compared to 2023 levels.

“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,” said Badal Yagnik, Chief Executive Officer, Colliers India.

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, Yagnik added.
According to the report, rising investments in the industrial and warehousing segment is a testament to healthy domestic activity, enhancements in logistics efficiency, and India's improving capabilities as a global manufacturing hub. Foreign investments drove over 80 per cent of the total inflows in the segment during the year.

Rising demand for superior quality Grade A developments and evolving supply-chain models will continue to incentivise investors in consolidating industrial & warehousing assets in the country, said Vimal Nadar, Senior Director and Head of Research, Colliers India.