Private equity (PE) investments in the Indian real estate sector reached $3.9 billion by the end of 2023, indicating a notable 14% year-on-year increase, as reported by property consulting firm Savills India. Foreign institutional investors continued to play a pivotal role, contributing 75% to the overall investment activity. Among various segments, commercial office assets took the lead with a 65% share in total PE investments, followed by residential assets at 15%, and industrial and warehousing at 10%. Mumbai emerged as the top destination for commercial office investments.
| Year | PE investment in Indian realty |
| 2018 | $6 billion |
| 2019 | $6.7 billion |
| 2020 | $6.6 billion |
| 2021 | $3.4 billion |
| 2022 | $3.4 billion |
| 2023 | $3.9 billion |
Source: RCA and Savills India
Despite challenges such as geopolitical uncertainties, global inflation concerns, and economic worries, private equity investments demonstrated resilience, providing attractive prospects for both global and domestic institutional investors. Savills India anticipates private equity investments in real estate to range between $3.5 billion and $4.0 billion in 2024. The office segment may witness subdued investments due to limited investable grade assets, while alternative sectors like life sciences, data centres, and student housing are expected to gain prominence.
Commercial offices maintained their leading position, supported by the robust performance of investible grade office assets. The residential and industrial sectors also experienced significant growth, with the former benefiting from strong end-user demand. The investor base is expected to diversify, particularly with increased participation from Asian institutional investors. In 2023, Japanese investors notably escalated their commitments in real estate, engaging in direct purchases and form
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