Foreign investors continued to lead institutional investments in India’s real estate sector, contributing 54% of the total investments in 2024, amounting to USD 3.7 billion. While their share declined from 65% in 2023, the value of their investments saw a 36% annual increase, according to a report by Vestian Research.
Domestic investors followed a similar trend, with their share dropping to 30% in 2024 from 35% in the previous year. However, they too recorded a 36% growth in investment value.
A notable highlight was the rise of co-investments—joint funding by foreign and domestic investors—which surged to 16% of total investments in 2024, compared to a negligible share in 2023. Co-investments registered a remarkable 61-fold increase in value, as foreign investors leveraged the local expertise of domestic partners amid macroeconomic uncertainty.
Institutional investments in real estate reached USD 6.8 billion in 2024, marking a 61% year-on-year increase and surpassing pre-pandemic levels. This resurgence comes after a four-year decline, driven largely by the industrial and warehousing sector, which benefited from robust e-commerce and quick-commerce demand.
Shifts in Asset Investment
The commercial real estate segment, which has traditionally dominated investments, accounted for 35% of total investments in 2024, down from 61% in 2023. The decline reflects a slowdown in the IT-ITeS sector, although growing demand for Global Capability Centers (GCCs) is expected to renew interest in office spaces.
Meanwhile, the residential sector attracted USD 2 billion in investments, representing 30% of the total and a 171% increase from 2023. Similarly, the industrial and warehousing sector grew by 203%, increasing its share from 15% in 2023 to 28% in 2024.
Yearly Investment Trends
Institutional investments rebounded in 2024 after consecutive declines since 2020. The yearly investment trend highlights the following:
| Year | Investments (USD Bn) | Y-o-Y Change (%) |
|---|---|---|
| 2019 | 6.5 | NA |
| 2020 | 5.9 | -9% |
| 2021 | 4.8 | -19% |
| 2022 | 4.9 | 2% |
| 2023 | 4.3 | -12% |
| 2024 | 6.8 | 61% |
Expert Outlook
Shrinivas Rao, FRICS, CEO of Vestian, noted, “Despite a slow start, institutional investments in 2024 exceeded pre-pandemic levels. However, 2025 could pose challenges due to geopolitical tensions, global economic slowdown, and elevated inflation. A potential repo rate cut by the RBI could stimulate real estate activity, attracting more investors.”
Return-to-office policies, government initiatives like the Production Linked Incentive (PLI) scheme, and a focus on affordable housing are expected to boost real estate demand and investor participation in the coming years.
Key Insights:
- Foreign Investors: 54% share, USD 3.7 billion investments.
- Co-Investments: 16% share, 61-fold increase in value.
- Sector Growth: Residential investments up by 171%; industrial and warehousing up by 203%.
- 2024 Total Investments: USD 6.8 billion, up 61% year-on-year.
Also Read: cross-border investment
