Industrial and Warehousing Lead Real Estate Investments in 2024, Surpassing USD 6.5 Billion: Colliers Report

According to a newly released report by Colliers India, USD 6.5 billion, a phenomenal increase of 22% from USD 5.4 billion in 2023, has flowed into professional real estate investments in India in 2024. This signals an unquenchable thirst of the investors’ community for Indian real estate, with both domestic and foreign investments registering record inflows ever since 2020.

The fourth quarter of 2024 was particularly booming, with the quarter seeing an investment of USD 1.9 billion, which in context rose more than 2.3 times the investment in the same period in 2023. The inflow from indigenous investors in Q4 constituted 43% of the investment, which indicates that with renewed international interest, confidence enjoys a resurgence among India-based institutional investors.

The industrial and warehousing sector retained its position as the highest investment-by-sector category, garnering USD 2.5 billion or 39% of total realty investments. This is the first time that the industrial & warehousing sector has overtaken office sector investments. The sector sees investments almost triple compared to 2023, owing to strong domestic economic activity, improvement in logistics infrastructure, and the fabulous rising profile of India as a global manufacturing hub.

The office segment comes in closely behind, attracting USD 2.3 billion of total investment or about 36%. On the other hand, residential assets saw a significant expansion of investments amounting to USD 1.1 billion, up 46% year-on-year, driven by domestic investors.

A breakdown of annual inflows also revealed that foreign investments made up 66% of the total number of inward movements, yielding USD 4.3 billion. Domestic investments rose 27% from the previous year. For office space, 77% of all investment came from foreign sources, with more than 80% of financing for industrial and warehousing coming from overseas investors.

Regionally, Mumbai was the leader: accounting for 58% of the investment done into office space and 20% into industrial and warehousing. Other cities of prominence like Bengaluru, Chennai, and Delhi-NCR made up approximately 8-9%.

Investment Inflows Breakdown (USD million):

• Office: USD 2,338.9 million (down 23% YoY)
• Residential: USD 1,149.1 million (up 46% YoY)
• Industrial & Warehousing: USD 2,541.6 million (up 190% YoY)
• Alternate Assets: USD 39.5 million (down 94% YoY)
• Retail: USD 104.4 million
• Total: USD 6,563.5 million (up 22% YoY).

Analysts predict that the industrial and warehousing categories will stay in high demand due to changing supply networks and India’s expanding manufacturing industry. Tier-I cities are expected to remain attractive as both domestic and foreign capital continue to flow into India’s real estate industry.