Foreign institutional investors led the Indian real estate market in 2024, contributing 88% of total investment activity, according to Savills India. Despite global challenges like geopolitical tensions, high inflation, and recessionary concerns, private equity investments sustained momentum, offering attractive opportunities for global and domestic investors.
India’s strong economic growth boosted investor confidence, leading to significant private equity inflows. The industrial and logistics sector emerged as the top choice, attracting USD 2.3 billion (Rs 194 billion) and accounting for 54% of total investments.
The residential sector gained traction due to the rising demand for premium housing, while alternative sectors like data centres and life sciences showed promising potential.
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Savills India predicts private equity investments in Indian real estate will reach USD 4.5 billion to USD 5 billion in 2025. However, the office segment may face muted investments due to limited investible-grade assets. Meanwhile, alternative sectors like life sciences and data centres are expected to rise in prominence.
The industrial and logistics sector is anticipated to remain a key focus as India strengthens its role as a global logistics hub. The emergence of Alternative Investment Funds (AIFs) is likely to reshape the investment landscape, with newer sectors gaining attention.
“India’s growing role as a supply chain hub has positioned the industrial and logistics sector at the forefront of private equity inflows,” said Arvind Nandan, Managing Director of Research & Consulting, at Savills India. He noted steady interest in commercial office spaces and the rising demand for premium housing as key investment drivers. The adoption of REITs, he added, will play a crucial role in shaping the future of real estate investments.