Surge in Private Equity Investments in Indian Real Estate

Private equity investments in the Indian real estate sector rose by 15% to USD 3 billion in H1 2024, driven by warehouse inflows. Knight Frank India's report highlights a sector shift, with warehousing taking the top spot, followed by residential and office sectors.

Private equity investments in real estate surged by 15 percent to USD 3 billion during January-June 2024, driven by significant inflows into warehousing assets, according to a report by Knight Frank India.

The report, 'Trends in Private Equity Investment in India: H1 2024,' released on Wednesday, indicated that PE investments totaling USD 3 billion were made in Indian real estate in the first half of 2024, reflecting a 15% year-on-year increase from USD 2.6 billion in H1 2023. The warehousing sector led with 52% of total PE investments in H1 2024, followed by residential at 29% and office at 20%.

Knight Frank underscored a shift in investor dynamics and sectoral preferences within private equity investments in Indian real estate. Notably, the office sector, which had been the prime recipient since 2018, was outpaced by the warehousing sector, which garnered more investment than the combined totals of the office, retail, and residential sectors.

The PE investment in the warehousing segment showed a stark upward trajectory in H1 2024, reaching USD 1.532 billion, marking a 176 percent surge from USD 555 million in the same period last year.

Residential sector investments also saw significant growth, jumping to USD 854 million in H1 2024 from USD 277 million in H1 2023.

The office sector received USD 579 million in investments during H1 2024, with a pronounced preference for ready assets.

(With inputs from agencies.)