APAC Investors Propel Indian Real Estate Growth with $1.3 Billion Investment in 2024

The Indian real estate market continues to captivate global attention, drawing institutional investments of $4.7 billion between January and September 2024. Of this, a significant $1.33 billion came from Asia-Pacific (APAC) investors, marking their 28% share in the total investment pool. This surge underscores India’s growing appeal as a top-tier investment destination.

Foreign investments accounted for 69% of the total inflow, with Singapore and the United States leading the charge, contributing equally at 21% each. According to Colliers, APAC investors are increasingly aligning their portfolios with the dynamic opportunities in India’s real estate sector.

The Rising Role of APAC Investors

Colliers’ survey reveals an optimistic outlook among APAC investors, with 69% of respondents planning to allocate over 30% of their global assets under management (AUM) to real estate within the next five years.

This shift highlights a growing appetite for diversified investments, as evidenced by a 10% allocation of APAC investments to industrial and logistics sectors. This trend is driven by assets such as data centers, last-mile logistics, and cold storage, with a particular focus on markets like Japan, Australia, and South Korea.

Office and Industrial Sectors: APAC’s Top Choices

The industrial and office real estate sectors remain at the forefront of APAC investors’ priorities for 2025.

According to Piyush Gupta, Managing Director of Capital Markets and Investment Services at Colliers India, the office sector is experiencing robust growth. “This growth is fuelled by global capability centers (GCCs) and rising domestic demand,” Gupta explains. Equity capital in Indian real estate is becoming increasingly diversified, with domestic capital playing a larger role in recent years.

Meanwhile, industrial and logistics real estate continues to attract attention. As Chris Pilgrim, Colliers’ Managing Director of Global Capital Markets, Asia Pacific, observes, “Investors are targeting high-demand alternatives like senior living, life sciences, and cold storage. However, the challenge lies in the lack of investable-grade assets in these sectors, a global issue expected to persist through 2025.”

The Residential Market: A Hotbed for Innovation

India’s residential real estate market is also undergoing significant transformation. In Tier-I cities, there is increasing investor participation in joint venture platforms and redevelopment projects.

Vimal Nadar, Senior Director and Head of Research at Colliers India, notes that this growth reflects the sector’s evolving dynamics. “Residential real estate is poised to attract more investment, driven by urbanization and a rising preference for premium projects in top-tier cities.”

Looking Ahead: Challenges and Opportunities

Despite the momentum, the real estate market faces challenges, including a limited supply of investable-grade assets in sectors like senior living and life sciences. However, experts remain optimistic about the sector's long-term potential. Diversification across asset classes and geographies is becoming a key strategy for investors.

As global and domestic capital continues to flow, India’s real estate market is poised for sustained growth. With strategic investments and a focus on emerging sectors, the future looks promising for this dynamic industry.