Indian Realty Sector Witnesses Steady Growth: PE Investments Surge to $2.82 Billion

Indian Realty Sector Witnesses Steady Growth: PE Investments Surge to $2.82 Billion

Private equity (PE) investments in the Indian real estate sector grew by 6% to USD 2.82 billion during the April-December period of FY2024-25. This growth reflects the sector's resilience and an increasing focus on industrial and logistics parks, as reported by real estate consultant Anarock.

Despite a drop in the number of PE deals from 30 last year to 24 this fiscal, the sector saw a significant influx of foreign capital, which contributed 82% of the total investments, while domestic funds made up 18%.

A Deep Dive Into Investment Trends

The industrial and logistics sector led the way, accounting for 62% of the total PE investments. Housing contributed 15%, while office spaces and mixed-use projects captured 14% and 9%, respectively.

Key transactions during this period included the landmark USD 1.54 billion Reliance-ADIA/KKR warehousing deal and the USD 204 million Blackstone-LOGOS equity deal. These transactions boosted the logistics and warehousing sectors, with hybrid deals accounting for 55% of total investments. Debt instruments made up 24%, and equity deals represented 21%, indicating a diversified investment approach.

Sector Experts Weigh In

Shobhit Agarwal, MD and CEO of Anarock Capital, highlighted that the top 10 deals contributed 93% of total PE investments during this period, showcasing a strategic focus on high-value transactions.

Vishal Khare, CEO and Founder of ARCA Alternatives, pointed to the growing diversity in real estate offerings such as medical services, education hubs, holiday homes, and senior care living. "This shift demonstrates investor confidence in the Indian real estate market," he said.

Ankur Jalan, CEO of Golden Growth Fund, remarked on the strong demand momentum in the sector and urged high-net-worth individuals (HNIs) in India and abroad to invest in key markets like Delhi for substantial returns.

A Year of Transformation

India's real estate market has undergone significant changes, supported by robust economic growth and rising demand for premium real estate solutions. Data from Knight Frank India revealed an increase in premium property sales, particularly in urban hubs like Mumbai, which accounted for 78% of sales in the Rs 20-50 crore segment.

The sector’s evolution from traditional residential and commercial projects to hybrid offerings highlights its adaptability and sophistication. As experts predict steady growth, India’s real estate market is positioned to remain a key driver of the country's economic development.