India’s Real Estate Shifts Gears As Residential Sector Overtakes Offices In Record Surge: JLL
Foreign institutional investors dominated the investment landscape, accounting for 63% of the total, while domestic investors contributed 37%.
For the first time in years, the residential sector emerged as the top investment destination in India's real estate market, capturing 45% of total investments and overtaking the traditionally dominant office sector, according to a report by JLL.
Institutional investments in the sector reached a historic high of $8.9 billion (approximately Rs 75,607 crore) in 2024, surpassing the previous peak of $8.4 billion (roughly Rs 71,326.5 crore) in 2007. This marks a 51% rise compared to $5.8 billion (approx. Rs 49,249.25 crore) in 2023, with deal activity increasing 47% year-on-year to 78 transactions.
Foreign institutional investors dominated the investment landscape, accounting for 63% of the total, while domestic investors contributed 37%. Qualified institutional placements played a significant role, raising $2.7 billion (roughly Rs 22,926.37 crore), with 57% of residential investments channeled through this route.
REIT investments reached nearly $800 million (approx. Rs 6,793 crore) in 2024, more than tripling from 2023 levels. The increased involvement of domestic institutions, particularly through REITs and QIPs, is a noteworthy development, with the trend likely to continue as the REIT market matures.
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Additionally, 77% of transaction volumes focused on non-core assets, such as data centres, student housing, life sciences, and healthcare, indicating an increased risk appetite among investors.
"Strong growth, political stability, and diverse investment opportunities positioned India favourably in the global economic context. Along with platform commitments, 2024 will see investor interest cross the $11 billion mark (approx. Rs 93,403.75 crore)," said Lata Pillai, senior managing director and head of capital markets, India, JLL.
The report highlighted a growing share of domestic investors, whose participation rose to 37% in 2024 from an average of 19% between 2019 and 2022. Pillai added that the momentum in REITs and QIPs is expected to sustain as the sector continues its robust post-pandemic recovery.
