Institutional Investments Set to Break 2023 Records

Indian real estate is on track for a groundbreaking year in 2024, with institutional investments expected to surpass the levels achieved in 2023, according to a recent report by Colliers. The “2025 Global Investor Outlook” from Colliers highlights that investments in key real estate sectors—office, industrial and warehousing, and residential—are driving this remarkable growth.

In the first nine months of 2024 alone, investments reached $4.7 billion, accounting for 87% of the total inflows seen throughout 2023. This strong momentum signals promising prospects for continued growth across various real estate asset classes in 2025, as per the report.

Steady Growth Since 2021

Since 2021, institutional inflows into Indian real estate have totaled $19 billion, with each year witnessing increased investment volumes. The consistent demand in core real estate sectors has played a crucial role in this growth trajectory. Over the past four years (2021–2024), office assets have accounted for more than 40% of these inflows, with industrial, warehousing, and residential sectors gaining significant momentum in recent years.

Key Drivers Across Real Estate Segments

The report highlights several factors contributing to this robust growth:

Office Sector: The sector is experiencing record absorption rates, driven by Global Capability Centers (GCCs) and strong domestic demand.

Residential Sector: End-user sales remain strong, and investor participation in joint venture platforms and redevelopment projects in Tier-I cities is increasing.

Industrial and Warehousing: Rising consumption patterns and robust demand from e-commerce and third-party logistics (3PL) players are bolstering this segment.

The diversification of equity capital in Indian real estate, with a growing share of domestic capital, is also playing a pivotal role in shaping the market.

Emerging Investment Opportunities in 2025

India’s evolving real estate landscape is creating compelling opportunities for investors in both core and non-core segments. Key areas of interest for 2025 include:

Developmental Assets in the Office Sector: Continued demand for high-quality office spaces is expected to drive significant investment.

Alternatives and Specialized Real Estate: Sectors like data centers, senior living, student housing, life sciences, holiday homes, and schools are becoming attractive investment avenues due to changing demographic patterns.

A Global Perspective

The insights for Colliers’ 2025 Global Investor Outlook are drawn from interviews with senior experts and a survey of nearly 1,000 property investors conducted in October and November 2024, including around 400 from the Asia-Pacific region.

The report underscores the immense potential of Indian real estate, supported by strong economic fundamentals and growing investor interest. With rising institutional inflows and expanding opportunities across diverse segments, 2025 is shaping up to be another record-breaking year for the sector.