Foreign Institutional Investors (FIIs) Drive Growth in Indian Real Estate with 88% Share of Private Equity Investments in 2024: Savills Report
New Delhi [India], December 29: Private equity investments in India’s real estate sector reached USD 4.3 billion (approximately Rs 356 billion) in 2024, marking a 10% year-on-year growth, according to the latest report by Savills India, a global property consulting firm. This surge reflects a sustained investment momentum despite global challenges, with foreign institutional investors (FIIs) playing a dominant role, accounting for 88% of the total private equity activity in the sector.
Despite facing geopolitical issues, high global inflation, and economic recessionary concerns, private equity inflows in India’s real estate sector have shown remarkable resilience. The strength of India’s economic growth has buoyed investor confidence, making the country an attractive destination for both global and domestic institutional investors.
The industrial and logistics sector emerged as the largest beneficiary, securing USD 2.3 billion (around Rs 194 billion), which represented 54% of the total private equity investments in 2024. The sector has gained considerable attention due to its potential as India strengthens its position as a global logistics hub. While the office sector’s share of investment decreased, it continued to demonstrate resilience, aided by the gradual return of employees to workplaces and the increasing demand for office space.
Meanwhile, the residential sector also saw growing interest, particularly in premium housing, driven by rising demand for higher-end properties. Furthermore, emerging sectors such as data centers and life sciences are expected to witness substantial growth in the coming years, providing new avenues for investment.
Looking ahead, Savills India projects that private equity investments in real estate will reach between USD 4.5 billion and USD 5.0 billion in 2025. However, the office segment may see muted investments due to limited availability of investible grade assets. On the other hand, alternative sectors like life sciences and data centers are anticipated to gain prominence, attracting more investment.
Savills India highlighted that the industrial and logistics sector is likely to remain a key focus area for investment as India strengthens its position in global supply chains.
Arvind Nandan, Managing Director of Research and Consulting at Savills India, emphasized the resilience of private equity investments in Indian real estate amidst global uncertainties. He noted that the trends reflect a strategic shift towards diversification, with the industrial and logistics sector leading the way. “While the commercial office segment continues to attract steady interest, the rise in demand for premium housing has also positioned the residential sector as a key investment avenue,” Nandan stated.
As the real estate market continues to evolve, Savills India predicts sustained growth in private equity inflows, with foreign institutional investors maintaining their dominant role.
Savills India, part of Savills Plc., operates in major cities across India, including Bengaluru, Mumbai, Delhi NCR, Chennai, Pune, Hyderabad, Ahmedabad, and Kolkata.
