New Delhi, January 15: Foreign investors continued to dominate institutional investments in 2024, accounting for 54 per cent of the total inflows, valued at USD 3.7 billion, according to Vestian report.
While their share declined from 65 per cent in 2023, the value of their investments rose by an impressive 36 per cent. Domestic investors followed a similar trend, with their share reducing to 30 per cent from 35 per cent in the previous year, yet witnessing a 36 per cent growth in value terms.
Co-investments, a collaborative funding approach between foreign and domestic investors, gained significant traction in 2024. These investments contributed 16 per cent of the total institutional inflows, marking a 61-fold increase in value compared to the negligible contribution in 2023.
This surge reflects the growing reliance of foreign investors on the local expertise of domestic partners amid prevailing macroeconomic uncertainties.
According to Vestian Research, total institutional investments rebounded strongly in 2024, reaching USD 6.8 billion, a remarkable 61 per cent increase from the previous year.
This resurgence broke a four-year downward trend, with investments experiencing consistent declines since 2020. The revival was driven by significant inflows into the industrial and warehousing sector, which benefited from robust demand in the e-commerce and quick commerce segments.
Despite the significant investment in the industrial and warehousing sector, commercial real estate continued to dominate institutional inflows in 2024, capturing 35 per cent of the total share.
However, this represented a sharp decline from its 61 per cent share in 2023, reflecting the global slowdown in the IT-ITeS sector. On the other hand, residential investments witnessed a significant surge, recording inflows of USD 2 billion in 2024.
This represented 30 per cent of the total investments, marking a 171 per cent increase over the previous year. The industrial and warehousing sector emerged as the standout performer in 2024, with investments surging by 203 per cent. Its share of institutional inflows rose to 28 per cent, compared to 15 per cent in 2023.
Shrinivas Rao, FRICS, CEO, Vestian, said, "Despite a slow start, the real estate sector received significant institutional investments in 2024, surpassing pre-pandemic levels. However, 2025 is expected to be challenging due to increasing geopolitical friction, a slowdown in the global economy, and elevated inflation levels. On the other hand, RBI is anticipated to reduce the repo rate in 2025, providing impetus to the real estate sector."
Looking ahead, factors such as return-to-office policies, government initiatives like the Production Linked Incentive (PLI) scheme, and a growing focus on affordable housing are expected to fuel demand in the real estate sector.
