How much private equity investment did Indian real estate receive in H1 2024?

In the first half of 2024, private equity (PE) investments in Indian real estate hit USD 3.0 billion, marking a 15% YoY surge despite global economic challenges including high interest rates, geopolitical tensions, and inflationary pressures. This robust performance underscores the resilience of India’s property market, where institutional-grade assets and policy reforms continue to draw capital.

Segments Attracting PE Funds:

• Commercial Office Spaces: IT/ITES and BFSI sectors drive demand for Grade A offices in Bangalore, Hyderabad, Pune, and Gurugram, ensuring stable occupancy and long-tenure leases.
• Industrial & Warehousing: E-commerce growth spurs the need for logistics hubs, attracting global players seeking reliable returns through long-term leasing.
• Residential: Affordable and mid-segment housing remains appealing, backed by government incentives and a renewed post-pandemic homeownership mindset.
• Alternative Assets: Data centers, senior living, and co-living reflect evolving consumer trends, offering higher yields in niche categories.

Why PE Investments Keep Flowing:

• Regulatory Support: RERA ensures transparency, while GST streamlines taxation, protecting investor interests and facilitating easier due diligence.
• Market Fundamentals: Rapid urbanization, rising incomes, and a young workforce underscore persistent demand for real estate.
• Attractive Risk-Reward Profile: Relative to other emerging markets, India’s higher rental yields and stable long-term returns appeal to global investors.

Analysts anticipate that PE inflows will remain strong through the rest of 2024, especially if global monetary conditions stabilize. With new project launches on the horizon and a maturing REIT market, private equity participation is set to reinforce India’s position as a fast-growing real estate hub.