Private equity investment in real estate up 15% to reach $3bn in H1 2024

The real estate sector has registered private equity investment worth $3 billion in the first half of 2024, which is a 15 per cent year-on-year jump from the figure of $2.6 billion in the same period last year.

Private equity investment in the housing sector witnessed a phenomenal surge of more than 209 per cent to touch $854 million in the first half of 2024 from $277 million in the same period last year, according to the latest report by Knight Frank India.

WAREHOUSES IN DEMAND

However, the report mentioned that the warehouse sector saw the biggest share of the private investment between January and June 2024, at 52 per cent. Warehouses have emerged as important investment options in the real estate business mainly owing to the booming e-commerce industry.

The housing sector followed in the second spot in terms of demand, drawing 29 per cent investment. The housing sector has been seeing a steady rise in demand for quite some time now, and has been attracting private equity investment in India pushed by rapid urbanisation and positive regulations from the government.

Offices accounted for 20 per cent of private equity investment. The office sector saw a slight slump in the six-month period from January to June in 2024 although there has been a growing demand for Grade A office space in prime locations with the rise of Global Capability Centres (GCCs).

“There is a shift in investor dynamics and sectoral preferences for private equity investments into Indian real estate sector. The office sector, which received the highest share of PE Investments since 2018, was surpassed by the warehousing sector, which became the most popular, attracting more investment than the combined totals of the office, retail, and residential sectors,” the Knight Frank report said.

MUMBAI, BENGALURU LEAD RACE

Among the big cities of India, Mumbai saw private equity investment worth $1,701 million in the first half of 2024, up from $1,242 million in the same period of 2023. The warehouse sector attracted 88 per cent of the total private equity investment in the city, accounting for $1,500 million. The housing sector added $201 million in terms of private equity investment, at 12 per cent. 

In Bengaluru, the real estate sector drew private equity investment worth $581 million, during the first half of 2024. Bengaluru and Mumbai apart, the cities attracting top private equity investment in the housing sector were Delhi-NCR, Hyderabad, Pune and Chennai.