1、Investments in Real Estateknightfrank.co.in/research2024Trends in Private Equity investments in India-2024Knight Franks comprehensive handbook showcasing trends in private equity(PE)investments within the Indian real estate sector across various asset categories.www.knightfrank.co.in/researchINVESTM

2、ENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024ContentsPage no.040 1Foreword0 3Page no.12Trends in PE Investments in Indian Real Estate SectorPage no.200 44.Private Equity 4.1 Residential Sector4.2 Offi

3、ce Sector4.3 Warehousing Sector 4.4 Retail Sector Page no.220 5The AIF Revolution:Catalysing Growth in Indian Real Estate0 2Page no.062024 in Review:Resilience and Renewal0 6Outlook and Conclusion4.Private Equity Investments in Real Estate Sectors4.1 Residential 4.2 Office 4.3 Warehousing 4.4 Retail

4、 www.knightfrank.co.in/researchINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024ContentsPage no.040 1Foreword0 3Page no.12Trends in PE Investments in Indian Real Estate SectorPage no.200 44.Private

5、 Equity 4.1 Residential Sector4.2 Office Sector4.3 Warehousing Sector 4.4 Retail Sector Page no.220 5The AIF Revolution:Catalysing Growth in Indian Real Estate0 2Page no.062024 in Review:Resilience and Renewal0 6Outlook and Conclusion4.Private Equity Investments in Real Estate Sectors4.1 Residential

6、 4.2 Office 4.3 Warehousing 4.4 Retail The Indian real estate market in 2024 exemplifies a journey of recovery,resilience,and strategic evolution.While global uncertainties such as high interest rates,geopolitical tensions,and inflationary pressures led to a cautious investment climate in 2023,2024

7、showcased a steady resurgence of investor confidence.Private equity(PE)investments in Indian real estate demonstrated a promising trajectory,growing from USD 3.1 bn in 2023 to an estimated USD 4.2 bn in 2024.The rebound was fuelled by several factors including Indias robust economic growth,measured

8、fiscal policies,and the markets capacity to adapt to shifting global dynamics.Domestic private equity players emerged as significant contributors,complementing the traditionally dominant foreign investors,particularly in sectors like residential real estate.This growing domestic participation unders

9、cores the confidence of Indian investors in the markets long-term potential.Alternative Investment Funds(AIFs)further solidified their role as key enablers of real estate growth,raising USD 7.5 bn since 2021 to fund residential,commercial,and logistics development.This shift toward structured and pr

10、ofessionally managed investments has democratized access to real estate,making the sector more inclusive and transparent.As global economic conditions show signs of stabilization,the Indian real estate market stands at the cusp of significant growth,bolstered by attractive valuations,government-led

11、infrastructure development,and a strong demand outlook across sectors.These favourable conditions,combined with a reserve of undeployed capital,are expected to drive sustained investment activity in the coming years.Knight Frank Capital Market Report 2024 offers a comprehensive analysis of instituti

12、onal private equity investments in Indian real estate,covering key trends,capital inflows,sectoral allocations,and emerging opportunities.We aim to equip investors,developers,and stakeholders with actionable insights to navigate this dynamic landscape and capitalize on the sectors evolving potential

13、.We trust that this report will serve as a valuable resource,guiding decision-makers toward informed strategies in one of Indias most promising investment arenas.Shishir BaijalChairman and Managing DirectorForeword45INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTME

14、NTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024The Indian real estate market in 2024 exemplifies a journey of recovery,resilience,and strategic evolution.While global uncertainties such as high interest rates,geopolitical tensions,and inflationary pressures led to a cautious inv

15、estment climate in 2023,2024 showcased a steady resurgence of investor confidence.Private equity(PE)investments in Indian real estate demonstrated a promising trajectory,growing from USD 3.1 bn in 2023 to an estimated USD 4.2 bn in 2024.The rebound was fuelled by several factors including Indias rob

16、ust economic growth,measured fiscal policies,and the markets capacity to adapt to shifting global dynamics.Domestic private equity players emerged as significant contributors,complementing the traditionally dominant foreign investors,particularly in sectors like residential real estate.This growing

17、domestic participation underscores the confidence of Indian investors in the markets long-term potential.Alternative Investment Funds(AIFs)further solidified their role as key enablers of real estate growth,raising USD 7.5 bn since 2021 to fund residential,commercial,and logistics development.This s

18、hift toward structured and professionally managed investments has democratized access to real estate,making the sector more inclusive and transparent.As global economic conditions show signs of stabilization,the Indian real estate market stands at the cusp of significant growth,bolstered by attracti

19、ve valuations,government-led infrastructure development,and a strong demand outlook across sectors.These favourable conditions,combined with a reserve of undeployed capital,are expected to drive sustained investment activity in the coming years.Knight Frank Capital Market Report 2024 offers a compre

20、hensive analysis of institutional private equity investments in Indian real estate,covering key trends,capital inflows,sectoral allocations,and emerging opportunities.We aim to equip investors,developers,and stakeholders with actionable insights to navigate this dynamic landscape and capitalize on t

21、he sectors evolving potential.We trust that this report will serve as a valuable resource,guiding decision-makers toward informed strategies in one of Indias most promising investment arenas.Shishir BaijalChairman and Managing DirectorForeword45INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVE

22、STMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20246 A Year of Recovery,Resilience,and RealignmentWrapping 2024India remained a standout performer,continuing to be one of the fastest-growing major economies globally.With a projected GDP growth rate of 6.

23、6%in 2024,the countrys economic momentum got fuelled by robust domestic consumption and strategic public infrastructure investments.Inflation moderated to 5.0%*from 5.36%in 2023,thanks to the Reserve Bank of Indias balanced approach of keeping interest rates steady while supporting growth and inflat

24、ion management.Indias equity markets reflected this resilience.The Nifty50 posted a 13.7%YTD increase,while the Nifty Realty Index gained 38%.IPO activity surged,with 298 IPOs raising INR 1,406 bn as of October a 22.6%increase in volume and a staggering 139%rise in funds raised compared to 2023.The

25、Indian real estate sector stood out,contributing nearly INR 135 bn through IPOs,almost double the amount raised in 2023.This growth across residential,commercial,and retail segments highlights investor optimism and Indias dynamic economic trajectory.2024 showcased remarkable resilience and adaptabil

26、ity as economies recalibrated amid significant challenges.Political shifts,monetary policy adjustments,and improved market performance laid the groundwork for a more stable global outlook.India,in particular,continued to shine as a key player in the global economic landscape,driven by robust growth

27、and investor confidence.Looking ahead,2025 promises to be a year of sustained recovery and progress as the world continues to build on the foundations laid this year.7As 2024 draws to a close,it will be remembered as a year of recalibration,where global economies worked towards stability amidst ling

28、ering challenges.The ongoing Russia-Ukraine conflict continued to disrupt energy markets and challenge geopolitical stability,underscoring the persistence of unresolved global tensions.The economic environment in 2024 was dominated by the aftermath of high inflation and aggressive interest rate hike

29、s by major central banks,including the US Federal Reserve and the European Central Bank.While these measures aimed to curb inflationary pressures,they also heightened concerns over economic growth and triggered instability in regional banking sectors.Despite these hurdles,2024 reflected significant

30、global efforts to recalibrate for a more stable and resilient future.This year also marked a notable political milestone with over 64 countries including the European Union,holding national elections,marking 2024 as a pivotal election year on a global scale.In the realm of monetary policy,the US Fed

31、eral Reserve and the European Central Bank shifted their stances,initiating rate cuts after multiple rate hikes post 2020,signalling a potential shift towards economic stimulus.Global stock markets reflected this shift,showing a marked improvement.The US Dow Jones index posted an impressive 18.45%*Y

32、TD return,rising from 13.7%in 2023.The UKs FTSE 100 climbed 8.2%*,buoyed by better-than-expected corporate earnings.Similarly,Singapores STI Index rose 16%*YTD,reflecting steady growth in the finance and real estate sectors,while Australias ASX 200 advanced 10.03%*,supported by gains in mining and t

33、echnology stocks.INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024*Data as on 6th December 2024 *-India inflation 1 year average(Oct 2023 Oct 2024)6 A Year of Recovery,Resilience,and RealignmentWra

34、pping 2024India remained a standout performer,continuing to be one of the fastest-growing major economies globally.With a projected GDP growth rate of 6.6%in 2024,the countrys economic momentum got fuelled by robust domestic consumption and strategic public infrastructure investments.Inflation moder

35、ated to 5.0%*from 5.36%in 2023,thanks to the Reserve Bank of Indias balanced approach of keeping interest rates steady while supporting growth and inflation management.Indias equity markets reflected this resilience.The Nifty50 posted a 13.7%YTD increase,while the Nifty Realty Index gained 38%.IPO a

36、ctivity surged,with 298 IPOs raising INR 1,406 bn as of October a 22.6%increase in volume and a staggering 139%rise in funds raised compared to 2023.The Indian real estate sector stood out,contributing nearly INR 135 bn through IPOs,almost double the amount raised in 2023.This growth across resident

37、ial,commercial,and retail segments highlights investor optimism and Indias dynamic economic trajectory.2024 showcased remarkable resilience and adaptability as economies recalibrated amid significant challenges.Political shifts,monetary policy adjustments,and improved market performance laid the gro

38、undwork for a more stable global outlook.India,in particular,continued to shine as a key player in the global economic landscape,driven by robust growth and investor confidence.Looking ahead,2025 promises to be a year of sustained recovery and progress as the world continues to build on the foundati

39、ons laid this year.7As 2024 draws to a close,it will be remembered as a year of recalibration,where global economies worked towards stability amidst lingering challenges.The ongoing Russia-Ukraine conflict continued to disrupt energy markets and challenge geopolitical stability,underscoring the pers

40、istence of unresolved global tensions.The economic environment in 2024 was dominated by the aftermath of high inflation and aggressive interest rate hikes by major central banks,including the US Federal Reserve and the European Central Bank.While these measures aimed to curb inflationary pressures,t

41、hey also heightened concerns over economic growth and triggered instability in regional banking sectors.Despite these hurdles,2024 reflected significant global efforts to recalibrate for a more stable and resilient future.This year also marked a notable political milestone with over 64 countries inc

42、luding the European Union,holding national elections,marking 2024 as a pivotal election year on a global scale.In the realm of monetary policy,the US Federal Reserve and the European Central Bank shifted their stances,initiating rate cuts after multiple rate hikes post 2020,signalling a potential sh

43、ift towards economic stimulus.Global stock markets reflected this shift,showing a marked improvement.The US Dow Jones index posted an impressive 18.45%*YTD return,rising from 13.7%in 2023.The UKs FTSE 100 climbed 8.2%*,buoyed by better-than-expected corporate earnings.Similarly,Singapores STI Index

44、rose 16%*YTD,reflecting steady growth in the finance and real estate sectors,while Australias ASX 200 advanced 10.03%*,supported by gains in mining and technology stocks.INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INV

45、ESTMENTS IN INDIA:2024*Data as on 6th December 2024 *-India inflation 1 year average(Oct 2023 Oct 2024)#Investments in Real EstateINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024Indian Private Equity Investment:Recovering Momentum in 2024Figure 1PE investments in Indian R

46、eal Estate rise 32%in 2024.Figure 2Source:Knight Frank Research,Venture Intelligence.2023 vs 202432%YoYInvestments in Real Estate1.Trends in Private Equity Investment in India in 2024Source:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 20242,451 1,133 2,030 2,2

47、22 4,565 5,082 7,619 7,803 6,581 3,945 6,199 5,357 3,137 4,153 6840505586877352472052312540Amount invested(USD mn)Number of deals1,1124071,4702,55844250911367905001,0001,5002,0002,5003,0003,5004,0004,50020232024Q1Q2Q3Q43,1344,153The Indian real estate market witnessed a remarkable surge in private e

48、quity(PE)investments in 2024,defying persistent global economic headwinds that had tempered foreign investor sentiment in previous years.Despite challenges such as high global interest rates,geopolitical tensions,and inflationary pressures,PE investments in Indian real estate reached an impressive U

49、SD 4.2 bn in 2024,marking a 32%YoY increase compared to 2023.These investments were diversified across key sectors including office,warehousing,and residential real estate,showcasing the broad appeal of the Indian market.The countrys strong economic fundamentals,underscored by its position as one of

50、 the fastest-growing economies globally,played a pivotal role in sustaining investor confidence.Additionally,a growing focus on multi-city deals helped attract substantial capital inflows,enabling the completion of several landmark transactions.Significantly,the top 10 PE transactions in 2024 accoun

51、ted for 75%of the total investments,reflecting a trend toward high-value,large-scale deals that underscore the markets attractiveness to institutional and strategic investors.This performance reaffirms the Indian real estate sectors resilience and its potential to offer robust returns.89#Investments

52、 in Real EstateINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024Indian Private Equity Investment:Recovering Momentum in 2024Figure 1PE investments in Indian Real Estate rise 32%in 2024.Figure 2Source:Knight Frank Research,Venture Intelligence.2023 vs 202432%YoYInvestments

53、in Real Estate1.Trends in Private Equity Investment in India in 2024Source:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 20242,451 1,133 2,030 2,222 4,565 5,082 7,619 7,803 6,581 3,945 6,199 5,357 3,137 4,153 6840505586877352472052312540Amount invested(USD mn)N

54、umber of deals1,1124071,4702,55844250911367905001,0001,5002,0002,5003,0003,5004,0004,50020232024Q1Q2Q3Q43,1344,153The Indian real estate market witnessed a remarkable surge in private equity(PE)investments in 2024,defying persistent global economic headwinds that had tempered foreign investor sentim

55、ent in previous years.Despite challenges such as high global interest rates,geopolitical tensions,and inflationary pressures,PE investments in Indian real estate reached an impressive USD 4.2 bn in 2024,marking a 32%YoY increase compared to 2023.These investments were diversified across key sectors

56、including office,warehousing,and residential real estate,showcasing the broad appeal of the Indian market.The countrys strong economic fundamentals,underscored by its position as one of the fastest-growing economies globally,played a pivotal role in sustaining investor confidence.Additionally,a grow

57、ing focus on multi-city deals helped attract substantial capital inflows,enabling the completion of several landmark transactions.Significantly,the top 10 PE transactions in 2024 accounted for 75%of the total investments,reflecting a trend toward high-value,large-scale deals that underscore the mark

58、ets attractiveness to institutional and strategic investors.This performance reaffirms the Indian real estate sectors resilience and its potential to offer robust returns.89Share of domestic investments reached its highest-level post 2011Figure 3Foreign investors maintained a dominant presence on th

59、e Indian real estate private equity(PE)landscape in 2024,contributing 68%of the total investments during the year.A notable trend of increasing domestic participation,however,continues to reshape the market,marking a shift that has gained momentum post the COVID-19 pandemic.Between 2011 and 2020,for

60、eign investors accounted for a commanding 89%share of PE investments,which moderated to an average of 79%in the post-pandemic period of 2021-2024.This decline reflects the impact of global economic challenges including high interest rates and inflationary pressures,which have tempered the enthusiasm

61、 of certain international players.Source:Knight Frank Research,Venture Intelligence10Conversely,domestic investors have emerged as significant contributors,with their share rising from 11%during the pre-pandemic decade to an average of 22%post-2020.This growth underscores increased capital availabil

62、ity within India and a heightened confidence in the resilience and long-term potential of the domestic real estate market.Figure 4Source:Knight Frank Research,Venture IntelligenceMiddle East PE investors dominate investment in 2024.Indian investors follow as second highest investors.Figure 5Source:K

63、night Frank Research,Venture IntelligenceShare of investments from the West dips post Covid,shrinks to 5%in 2024.0%10%20%30%40%50%60%70%80%90%100%20112012201320142015201620172018201920202021202220232024PE InvestmentsCanadaUKUSAChinaIndiaSingaporeJapanSouth KoreaUAE53%91%98%100%100%100%94%79%83%92%74

64、%94%78%68%47%9%2%0%0%0%6%21%17%8%26%6%22%32%0%20%40%60%80%100%20112012201320142015201620172018201920202021202220232024ForeignIndia0%20%40%60%80%100%20112012201320142015201620172018201920202021202220232024PE Investments WestAsia-Ex IndiaIndiaMiddle East11INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQ

65、UITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024Share of domestic investments reached its highest-level post 2011Figure 3Foreign investors maintained a dominant presence on the Indian real estate private equity(PE)landscape in 2024,contributi

66、ng 68%of the total investments during the year.A notable trend of increasing domestic participation,however,continues to reshape the market,marking a shift that has gained momentum post the COVID-19 pandemic.Between 2011 and 2020,foreign investors accounted for a commanding 89%share of PE investment

67、s,which moderated to an average of 79%in the post-pandemic period of 2021-2024.This decline reflects the impact of global economic challenges including high interest rates and inflationary pressures,which have tempered the enthusiasm of certain international players.Source:Knight Frank Research,Vent

68、ure Intelligence10Conversely,domestic investors have emerged as significant contributors,with their share rising from 11%during the pre-pandemic decade to an average of 22%post-2020.This growth underscores increased capital availability within India and a heightened confidence in the resilience and

69、long-term potential of the domestic real estate market.Figure 4Source:Knight Frank Research,Venture IntelligenceMiddle East PE investors dominate investment in 2024.Indian investors follow as second highest investors.Figure 5Source:Knight Frank Research,Venture IntelligenceShare of investments from

70、the West dips post Covid,shrinks to 5%in 2024.0%10%20%30%40%50%60%70%80%90%100%20112012201320142015201620172018201920202021202220232024PE InvestmentsCanadaUKUSAChinaIndiaSingaporeJapanSouth KoreaUAE53%91%98%100%100%100%94%79%83%92%74%94%78%68%47%9%2%0%0%0%6%21%17%8%26%6%22%32%0%20%40%60%80%100%20112

71、012201320142015201620172018201920202021202220232024ForeignIndia0%20%40%60%80%100%20112012201320142015201620172018201920202021202220232024PE Investments WestAsia-Ex IndiaIndiaMiddle East11INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN P

72、RIVATE EQUITY INVESTMENTS IN INDIA:202416%35%46%40%29%27%34%54%49%64%46%45%56%26%0%2%0%0%1%13%9%3%14%6%13%6%0%4%0%0%14%5%2%29%25%27%21%21%37%25%45%79%63%54%46%65%57%28%18%11%9%19%12%18%28%0%20%40%60%80%100%20112012201320142015201620172018201920202021202220232024OfficeRetailWarehousingResidential12Th

73、e Indian real estate sector has witnessed significant transformations in its private equity(PE)investment landscape since 2011,driven by government led reforms that eased investment norms and encouraged foreign participation.Over the years,foreign capital has played a pivotal role in shaping the sec

74、tor with investments from Western countries and Asia dominating the scene.In terms of geographical distribution,the US and Canada emerged as dominant contributors during the early years,collectively averaging 45%of the total foreign investments between 2011 and 2020.Singapore followed closely,contri

75、buting an average of 29%,highlighting the increasing prominence of Asian investors in the Indian real estate market.However,post 2020,global economic challenges including repeated interest rate hikes in North America,led to a consistent decline in Western investments.The share of investments from th

76、e West plummeted to 5%in 2024,compared to their peak dominance in the previous decade.This retreat of Western capital paved the way for Asian and Middle Eastern investors to step into the spotlight.Middle Eastern investors accounted for 42%of the total investments in 2024,marking their highest share

77、 to date.Concurrently,Indian investors demonstrated remarkable growth,increasing their share to 32%in 2024,a significant rise from an average of 10%in the pre-pandemic years(2011-2020).This growth underscores the strengthening financial capacity and confidence of domestic players in the long-term po

78、tential of Indian real estate.Notably,this shift signals a structural evolution in the investment landscape.The increasing participation of Indian PE investors,alongside growing interest from the Middle East,highlights a diversification of capital sources.This trend positions the Indian real estate

79、sector for sustained growth,driven by a more balanced mix of domestic and international investments that adapt to evolving global market dynamics.Office sector takes a backseat as Warehousing sector leads;Share of Residential rise to highest level since 2017Figure 6Source:Knight Frank Research,Ventu

80、re IntelligenceOver the years,private equity(PE)investments in Indian real estate have undergone significant shifts,with the warehousing sector emerging as the dominant force in recent years.As the e-commerce industry expanded,there was a notable surge in demand for large-scale storage facilities to

81、 accommodate the growing volume of online transactions.This growth,combined with ongoing supply chain disruptions that required businesses to maintain higher inventory levels,has made warehousing the preferred asset class.As a result,the warehousing sector has consistently attracted the largest shar

82、e of capital in recent years.At the same time,the residential sector has experienced a resurgence,reclaiming its position as the second-most attractive investment segment in 2024.This resurgence is driven by strong demand fundamentals such as rising urbanization,population growth,and a shift in cons

83、umer preferences toward premium housing.Domestic investors,with their deeper understanding of the local market,have capitalized on opportunities within the residential sector,leading to a strong recovery in investment levels.In contrast,the office sector,once a leader in real estate investments,saw

84、a decline in its share since 2020.However,Office sector continues to remain resilient,supported by factors such as the return to workplaces,increasing office absorption,and strengthening rental values.The retail sector has experienced a mixed recovery,with investment levels fluctuating.The retail ma

85、rket continues to attract interest,particularly in prime locations with a strong potential for long-term growth.However,the availability of ready quality assets continues to pose a challenge.This combination of a strong warehousing market and the return of investor interest in residential real estat

86、e signals a broader shift in the Indian real estate market.The evolving investment landscape underscores the importance of diversification,with warehousing and residential real estate offering strong growth potential in the coming years.As both sectors adapt to changing market conditions,they are po

87、ised to remain key investment opportunities,aligning with global trends while leveraging Indias domestic strengths to attract both local and foreign capital.In 2024,Mumbai continued to dominate the Indian real estate investment landscape,attracting USD 2.1 bn,a figure that mirrors the previous years

88、 performance,with only a slight decline from USD 2,078 mn in 2023.Other key cities in India,such as Bangalore(USD 833 mn),NCR(USD 469 mn),and Hyderabad(USD 357 mn),contributed significantly to the total investment pool.Although Pune saw a modest increase in investment,reaching USD 113 mn in 2024 com

89、pared to just USD 27 mn in 2023,it remains a smaller player relative to Mumbai and Bangalore.While Mumbais position as the leading investment destination remained unchanged,the growth of South India in the investment landscape was noteworthy.The share of South Indian cities in the total investments

90、rose sharply from 17%in 2023 to 36%in 2024.Bengaluru received USD 833 mn,making it the second-largest recipient of real estate investments in India,followed by Hyderabad with USD 357 mn and Chennai with USD 316 mn.Looking ahead,a detailed examination of the various asset classes such as office space

91、s,residential properties,retail establishments,and warehousing facilities,will provide a clearer understanding of the investment dynamics shaping Indias real estate sector in 2024.Mumbai continues to dominate PE investments in 2024Figure 7Source:Knight Frank Research 2024(USD mn)2023(USD mn)2,068 83

92、3 469 357 316 113 -500 1,000 1,500 2,000 2,5002024(USD mn)2,078 487 347 114 27 12 73 -500 1,000 1,500 2,000 2,5002023(USD mn)Source:Knight Frank Research13INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN IND

93、IA:202416%35%46%40%29%27%34%54%49%64%46%45%56%26%0%2%0%0%1%13%9%3%14%6%13%6%0%4%0%0%14%5%2%29%25%27%21%21%37%25%45%79%63%54%46%65%57%28%18%11%9%19%12%18%28%0%20%40%60%80%100%20112012201320142015201620172018201920202021202220232024OfficeRetailWarehousingResidential12The Indian real estate sector has

94、witnessed significant transformations in its private equity(PE)investment landscape since 2011,driven by government led reforms that eased investment norms and encouraged foreign participation.Over the years,foreign capital has played a pivotal role in shaping the sector with investments from Wester

95、n countries and Asia dominating the scene.In terms of geographical distribution,the US and Canada emerged as dominant contributors during the early years,collectively averaging 45%of the total foreign investments between 2011 and 2020.Singapore followed closely,contributing an average of 29%,highlig

96、hting the increasing prominence of Asian investors in the Indian real estate market.However,post 2020,global economic challenges including repeated interest rate hikes in North America,led to a consistent decline in Western investments.The share of investments from the West plummeted to 5%in 2024,co

97、mpared to their peak dominance in the previous decade.This retreat of Western capital paved the way for Asian and Middle Eastern investors to step into the spotlight.Middle Eastern investors accounted for 42%of the total investments in 2024,marking their highest share to date.Concurrently,Indian inv

98、estors demonstrated remarkable growth,increasing their share to 32%in 2024,a significant rise from an average of 10%in the pre-pandemic years(2011-2020).This growth underscores the strengthening financial capacity and confidence of domestic players in the long-term potential of Indian real estate.No

99、tably,this shift signals a structural evolution in the investment landscape.The increasing participation of Indian PE investors,alongside growing interest from the Middle East,highlights a diversification of capital sources.This trend positions the Indian real estate sector for sustained growth,driv

100、en by a more balanced mix of domestic and international investments that adapt to evolving global market dynamics.Office sector takes a backseat as Warehousing sector leads;Share of Residential rise to highest level since 2017Figure 6Source:Knight Frank Research,Venture IntelligenceOver the years,pr

101、ivate equity(PE)investments in Indian real estate have undergone significant shifts,with the warehousing sector emerging as the dominant force in recent years.As the e-commerce industry expanded,there was a notable surge in demand for large-scale storage facilities to accommodate the growing volume

102、of online transactions.This growth,combined with ongoing supply chain disruptions that required businesses to maintain higher inventory levels,has made warehousing the preferred asset class.As a result,the warehousing sector has consistently attracted the largest share of capital in recent years.At

103、the same time,the residential sector has experienced a resurgence,reclaiming its position as the second-most attractive investment segment in 2024.This resurgence is driven by strong demand fundamentals such as rising urbanization,population growth,and a shift in consumer preferences toward premium

104、housing.Domestic investors,with their deeper understanding of the local market,have capitalized on opportunities within the residential sector,leading to a strong recovery in investment levels.In contrast,the office sector,once a leader in real estate investments,saw a decline in its share since 202

105、0.However,Office sector continues to remain resilient,supported by factors such as the return to workplaces,increasing office absorption,and strengthening rental values.The retail sector has experienced a mixed recovery,with investment levels fluctuating.The retail market continues to attract intere

106、st,particularly in prime locations with a strong potential for long-term growth.However,the availability of ready quality assets continues to pose a challenge.This combination of a strong warehousing market and the return of investor interest in residential real estate signals a broader shift in the

107、 Indian real estate market.The evolving investment landscape underscores the importance of diversification,with warehousing and residential real estate offering strong growth potential in the coming years.As both sectors adapt to changing market conditions,they are poised to remain key investment op

108、portunities,aligning with global trends while leveraging Indias domestic strengths to attract both local and foreign capital.In 2024,Mumbai continued to dominate the Indian real estate investment landscape,attracting USD 2.1 bn,a figure that mirrors the previous years performance,with only a slight

109、decline from USD 2,078 mn in 2023.Other key cities in India,such as Bangalore(USD 833 mn),NCR(USD 469 mn),and Hyderabad(USD 357 mn),contributed significantly to the total investment pool.Although Pune saw a modest increase in investment,reaching USD 113 mn in 2024 compared to just USD 27 mn in 2023,

110、it remains a smaller player relative to Mumbai and Bangalore.While Mumbais position as the leading investment destination remained unchanged,the growth of South India in the investment landscape was noteworthy.The share of South Indian cities in the total investments rose sharply from 17%in 2023 to

111、36%in 2024.Bengaluru received USD 833 mn,making it the second-largest recipient of real estate investments in India,followed by Hyderabad with USD 357 mn and Chennai with USD 316 mn.Looking ahead,a detailed examination of the various asset classes such as office spaces,residential properties,retail

112、establishments,and warehousing facilities,will provide a clearer understanding of the investment dynamics shaping Indias real estate sector in 2024.Mumbai continues to dominate PE investments in 2024Figure 7Source:Knight Frank Research 2024(USD mn)2023(USD mn)2,068 833 469 357 316 113 -500 1,000 1,5

113、00 2,000 2,5002024(USD mn)2,078 487 347 114 27 12 73 -500 1,000 1,500 2,000 2,5002023(USD mn)Source:Knight Frank Research13INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202415PE Investments in Resid

114、ential14PE INVESTMENTS IN RESIDENTIALPE investments in Residential Sector surges in 2024PE investments in Residential Sector rose 104%YoY in 2024Figure 9Source:Knight Frank Research,Venture IntelligenceSource:Knight Frank Research,Venture IntelligenceThe residential sector witnessed significant grow

115、th in 2024 with domestic Private Equity(PE)investments playing a pivotal role in driving this momentum.As Indias population expands and urbanization accelerates,there is a sustained demand for accessible and quality housing,creating substantial investment opportunities that are being recognized by P

116、E investors.Figure 81,943 712 1,096 1,028 2,952 2,913 2,096 1,370 717 368 1,187 654 577 1,177 613543497475462118723101026Amount invested(USD mn)Number of deals*Investments considered till 10th December 202425518122673300132191020040060080010001200140020232024Q1Q2Q3Q45771,177104%YoYINVESTMENTS IN REA

117、L ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202415PE Investments in Residential14PE INVESTMENTS IN RESIDENTIALPE investments in Residential Sector surges in 2024PE investments in Residential Sector rose 104%YoY in

118、2024Figure 9Source:Knight Frank Research,Venture IntelligenceSource:Knight Frank Research,Venture IntelligenceThe residential sector witnessed significant growth in 2024 with domestic Private Equity(PE)investments playing a pivotal role in driving this momentum.As Indias population expands and urban

119、ization accelerates,there is a sustained demand for accessible and quality housing,creating substantial investment opportunities that are being recognized by PE investors.Figure 81,943 712 1,096 1,028 2,952 2,913 2,096 1,370 717 368 1,187 654 577 1,177 613543497475462118723101026Amount invested(USD

120、mn)Number of deals*Investments considered till 10th December 202425518122673300132191020040060080010001200140020232024Q1Q2Q3Q45771,177104%YoYINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202417Inves

121、tments observed both in under-construction properties and new developments.Figure 11High-risk,high reward:Equity investments in Residential Sector surge as investors chase higher returns Figure 1220232024Under Construction100%Under Construction65%New Development35%Source:Knight Frank Research,Ventur

122、e IntelligenceSource:Knight Frank Research,Venture Intelligence31%34%32%56%51%68%48%79%65%48%19%40%48%25%69%66%68%44%49%32%52%21%35%52%81%60%52%75%20112012201320142015201620172018201920202021202220232024DebtEquity16During 2024,PE investments in the residential sector saw a remarkable surge,reaching

123、USD 1.2 bn,surpassing the total investments of 2022 and 2023.This increase was driven primarily by domestic capital which now constitutes 70%of the investment pie,while foreign investments made up 30%.This shift reflects growing confidence in the domestic market and investor preference for local opp

124、ortunities.Mumbai,Bengaluru and Delhi-NCR attracted the highest investments with Mumbai leading at USD 406 mn,followed by Bengaluru at USD 403 mn,and Delhi-NCR at USD 202 mn.Equity funding dominated the landscape with 75%of the total investments in 2024 coming from equity sources.This highlights inv

125、estor confidence in the residential sectors growth potential,signalling that they are more willing to take on higher stakes in developments as opposed to relying on debt.The residential sector is increasingly seen as a lucrative destination for long-term capital,with a growing number of projects bei

126、ng funded at early stages,demonstrating investor optimism about the sectors future.In addition to the substantial rise in investments,the distribution of funds across the country illustrates the broad appeal of Indias residential market.The nationwide interest indicates that the sectors growth is no

127、t confined to one region but is a pan-India phenomenon,driven by strong demand in both established and emerging cities.This surge in PE investments,coupled with favourable government policies and the sectors inherent growth potential,positions Indias residential real estate market for sustained long

128、-term growth.The involvement of both domestic and international investors,alongside the sectors increasing reliance on equity,marks a transformative phase in its development,ensuring that it remains an attractive investment option moving forward.PE investments received across India in Residential Se

129、ctorTable 1City Investment(USD mn)Bengaluru 406Mumbai 403Delhi-NCR 202Hyderabad 92 Pune 46 Chennai 28Total 1,177Source:Knight Frank Research,Venture IntelligenceShare of Foreign Players Rises in 2024Figure 10Source:Knight Frank Research,Venture Intelligence54%59%50%30%46%41%50%70%2021202220232024For

130、eignIndia-dedicatedINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202417Investments observed both in under-construction properties and new developments.Figure 11High-risk,high reward:Equity investmen

131、ts in Residential Sector surge as investors chase higher returns Figure 1220232024Under Construction100%Under Construction65%New Development35%Source:Knight Frank Research,Venture IntelligenceSource:Knight Frank Research,Venture Intelligence31%34%32%56%51%68%48%79%65%48%19%40%48%25%69%66%68%44%49%32

132、%52%21%35%52%81%60%52%75%20112012201320142015201620172018201920202021202220232024DebtEquity16During 2024,PE investments in the residential sector saw a remarkable surge,reaching USD 1.2 bn,surpassing the total investments of 2022 and 2023.This increase was driven primarily by domestic capital which

133、now constitutes 70%of the investment pie,while foreign investments made up 30%.This shift reflects growing confidence in the domestic market and investor preference for local opportunities.Mumbai,Bengaluru and Delhi-NCR attracted the highest investments with Mumbai leading at USD 406 mn,followed by

134、Bengaluru at USD 403 mn,and Delhi-NCR at USD 202 mn.Equity funding dominated the landscape with 75%of the total investments in 2024 coming from equity sources.This highlights investor confidence in the residential sectors growth potential,signalling that they are more willing to take on higher stake

135、s in developments as opposed to relying on debt.The residential sector is increasingly seen as a lucrative destination for long-term capital,with a growing number of projects being funded at early stages,demonstrating investor optimism about the sectors future.In addition to the substantial rise in

136、investments,the distribution of funds across the country illustrates the broad appeal of Indias residential market.The nationwide interest indicates that the sectors growth is not confined to one region but is a pan-India phenomenon,driven by strong demand in both established and emerging cities.Thi

137、s surge in PE investments,coupled with favourable government policies and the sectors inherent growth potential,positions Indias residential real estate market for sustained long-term growth.The involvement of both domestic and international investors,alongside the sectors increasing reliance on equ

138、ity,marks a transformative phase in its development,ensuring that it remains an attractive investment option moving forward.PE investments received across India in Residential SectorTable 1City Investment(USD mn)Bengaluru 406Mumbai 403Delhi-NCR 202Hyderabad 92 Pune 46 Chennai 28Total 1,177Source:Kni

139、ght Frank Research,Venture IntelligenceShare of Foreign Players Rises in 2024Figure 10Source:Knight Frank Research,Venture Intelligence54%59%50%30%46%41%50%70%2021202220232024ForeignIndia-dedicatedINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATET

140、RENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202419Despite a decline in total investments in the office sector in 2024,the sector remains a key player in the Indian real estate market,attracting a total of USD 1,098 mn in PE investments.However,when compared to 2023,this represents a 38%YoY decline.

141、While foreign investment in office assets has traditionally been strong due to their stable returns and high demand,the reduction in investments from foreign players in 2024,which remained the highest investor in this sector,contributed to the overall decline in office sector investments.Nevertheles

142、s,demand for Grade A office spaces in prime locations continues to be robust,driven by ongoing urbanization and the need for modern,high-quality workspaces.In 2024,there was a continued preference for ready assets with 82%of the investments directed toward completed office spaces,while just 18%went

143、to projects under construction.This shift in preference towards ready-to-use properties reflects a more cautious approach by investors who are increasingly prioritizing assets that provide immediate rental income over those that carry the uncertainties associated with ongoing developments.Geographic

144、ally,major cities like Bengaluru,NCR,Hyderabad,and Mumbai have emerged as key hubs for office investments.These cities have witnessed strong economic growth and are attracting Investors opt for safer investment avenues,exercising caution in their approachFigure 15Under Construction9%Ready91%Source:K

145、night Frank Research,Venture Intelligenceconsiderable PE interest.The demand for office spaces in these cities is driven by factors such as burgeoning IT sectors,government initiatives,and expanding infrastructure,cementing their position as key investment destinations.Looking ahead,the outlook for

146、office investments remains positive,albeit with evolving requirements.As businesses continue to embrace hybrid and flexible work models,the demand for collaborative and adaptable office spaces is expected to grow.Moreover,with limited availability of Grade A office spaces in prime locations,rental r

147、ates are projected to rise,enhancing the attractiveness of Indian office assets for PE investors seeking long-term capital appreciation.In conclusion,lack of investment grade supply led to decline in investment in the office sector,however,its potential for PE investment remains significant.By embra

148、cing innovative solutions and aligning with the changing needs of modern businesses,the office sector can continue to be a critical part of Indias real estate landscape,driving long-term growth and offering valuable investment opportunities.18Office Real Estate feels the pinch in 2024.Figure 13PE In

149、vestments in Office SectorSource:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 2024PE investments in Office Sector declined by 38%in 2024.Figure 14Source:Knight Frank Research,Venture Intelligence1,763Ready82%Under Construction18%2023202435119414003851237714302

150、0040060080010001200140016001800200020232024Q1Q2Q3Q4399 393 934 893 1,326 1,392 2,612 4,201 3,198 2,509 2,882 2,494 1,763 1,098 5 4 7 5 10 6 14 21 17 7 1412 5 8 Amount invested(USD mn)Number of deals38%YoY1,098INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN

151、REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202419Despite a decline in total investments in the office sector in 2024,the sector remains a key player in the Indian real estate market,attracting a total of USD 1,098 mn in PE investments.However,when compared to 2023,this represents a 38%

152、YoY decline.While foreign investment in office assets has traditionally been strong due to their stable returns and high demand,the reduction in investments from foreign players in 2024,which remained the highest investor in this sector,contributed to the overall decline in office sector investments

153、.Nevertheless,demand for Grade A office spaces in prime locations continues to be robust,driven by ongoing urbanization and the need for modern,high-quality workspaces.In 2024,there was a continued preference for ready assets with 82%of the investments directed toward completed office spaces,while j

154、ust 18%went to projects under construction.This shift in preference towards ready-to-use properties reflects a more cautious approach by investors who are increasingly prioritizing assets that provide immediate rental income over those that carry the uncertainties associated with ongoing development

155、s.Geographically,major cities like Bengaluru,NCR,Hyderabad,and Mumbai have emerged as key hubs for office investments.These cities have witnessed strong economic growth and are attracting Investors opt for safer investment avenues,exercising caution in their approachFigure 15Under Construction9%Read

156、y91%Source:Knight Frank Research,Venture Intelligenceconsiderable PE interest.The demand for office spaces in these cities is driven by factors such as burgeoning IT sectors,government initiatives,and expanding infrastructure,cementing their position as key investment destinations.Looking ahead,the

157、outlook for office investments remains positive,albeit with evolving requirements.As businesses continue to embrace hybrid and flexible work models,the demand for collaborative and adaptable office spaces is expected to grow.Moreover,with limited availability of Grade A office spaces in prime locati

158、ons,rental rates are projected to rise,enhancing the attractiveness of Indian office assets for PE investors seeking long-term capital appreciation.In conclusion,lack of investment grade supply led to decline in investment in the office sector,however,its potential for PE investment remains signific

159、ant.By embracing innovative solutions and aligning with the changing needs of modern businesses,the office sector can continue to be a critical part of Indias real estate landscape,driving long-term growth and offering valuable investment opportunities.18Office Real Estate feels the pinch in 2024.Fi

160、gure 13PE Investments in Office SectorSource:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 2024PE investments in Office Sector declined by 38%in 2024.Figure 14Source:Knight Frank Research,Venture Intelligence1,763Ready82%Under Construction18%2023202435119414003

161、8512377143020040060080010001200140016001800200020232024Q1Q2Q3Q4399 393 934 893 1,326 1,392 2,612 4,201 3,198 2,509 2,882 2,494 1,763 1,098 5 4 7 5 10 6 14 21 17 7 1412 5 8 Amount invested(USD mn)Number of deals38%YoY1,098INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INV

162、ESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202421The warehousing sectors future remains promising with sustained growth driven by the ongoing expansion of logistics,manufacturing,and e-commerce businesses.As demand for modern,tech-enabled warehouses continues to rise,PE inv

163、estors are well-positioned to capitalize on the sectors growth trajectory.In conclusion,the warehousing sector emerged as the top investment destination in 2024.Its strong fundamentals,Investors opt for safer ready assets,due to dearth of available quality assetsFigure 18New development11%Under Cons

164、truction24%Ready65%Source:Knight Frank Research,Venture Intelligencefavourable government policies,and continued growth in e-commerce and logistics make it an attractive option for investors.As the market matures and overcomes existing challenges,the sector is poised to play a key role in Indias rea

165、l estate landscape,contributing to the countrys economic growth and positioning warehousing as a vital asset class in the years to come.Ready98%Under Construction2%2023 2024109-300 250 125 2,191 1,987 1,744 848 1,313 1,907 684 1,877 2-1 1 1 7 6 6 4 11786Amount invested(USD mn)Number of deals20PE Inv

166、estments in WarehousingFigure 16Investments in Warehousing Sector surged 136%YoY in 2024 Figure 17Source:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 2024Source:Knight Frank Research,Venture IntelligenceThe warehousing sector saw a remarkable surge in investme

167、nts in 2024,with total PE investments reaching USD 1,877 mn,a significant increase from USD 684 mn in 2023.This growth highlights the growing interest in the warehousing segment,driven primarily by the robust expansion of e-commerce,logistics,and third-party logistics(3PL)facilities,all of which are

168、 capitalizing on the rise of online retail and supply chain optimization.Investors continue to show a strong preference for warehousing assets,particularly in the rapidly growing e-commerce and logistics subsectors.With e-commerce set to continue its rapid expansion,the demand for modern,efficient w

169、arehouse spaces remains on the rise.Additionally,the growing need for optimized supply chains,coupled with advancements in technology,has fuelled further growth,particularly in Tier-II and Tier-III cities,where the pace of infrastructure development is accelerating.Government initiatives like the Na

170、tional Logistics Policy and the creation of industrial corridors have significantly boosted investor confidence in the warehousing market.These measures aim to streamline logistics,reduce transportation costs,and improve infrastructure,creating a favourable environment for businesses to thrive.Despi

171、te these advances,challenges such as land acquisition and infrastructure bottlenecks persist,requiring attention to fully unlock the potential of the sector.In 2024,a shift in investment preferences was evident,with 98%of funds directed toward ready-to-use assets,indicating investor confidence in co

172、mpleted properties with immediate income-generation potential.Only 2%was allocated to under-construction projects.136%YoYWarehousing Sector led the investment space,received investments worth USD 1,877 mn in 2024.50632491,50012911334502004006008001,0001,2001,4001,6001,8002,00020242024Q1Q2Q3Q47971,87

173、7INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202421The warehousing sectors future remains promising with sustained growth driven by the ongoing expansion of logistics,manufacturing,and e-commerce

174、businesses.As demand for modern,tech-enabled warehouses continues to rise,PE investors are well-positioned to capitalize on the sectors growth trajectory.In conclusion,the warehousing sector emerged as the top investment destination in 2024.Its strong fundamentals,Investors opt for safer ready asset

175、s,due to dearth of available quality assetsFigure 18New development11%Under Construction24%Ready65%Source:Knight Frank Research,Venture Intelligencefavourable government policies,and continued growth in e-commerce and logistics make it an attractive option for investors.As the market matures and ove

176、rcomes existing challenges,the sector is poised to play a key role in Indias real estate landscape,contributing to the countrys economic growth and positioning warehousing as a vital asset class in the years to come.Ready98%Under Construction2%2023 2024109-300 250 125 2,191 1,987 1,744 848 1,313 1,9

177、07 684 1,877 2-1 1 1 7 6 6 4 11786Amount invested(USD mn)Number of deals20PE Investments in WarehousingFigure 16Investments in Warehousing Sector surged 136%YoY in 2024 Figure 17Source:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 2024Source:Knight Frank Resear

178、ch,Venture IntelligenceThe warehousing sector saw a remarkable surge in investments in 2024,with total PE investments reaching USD 1,877 mn,a significant increase from USD 684 mn in 2023.This growth highlights the growing interest in the warehousing segment,driven primarily by the robust expansion o

179、f e-commerce,logistics,and third-party logistics(3PL)facilities,all of which are capitalizing on the rise of online retail and supply chain optimization.Investors continue to show a strong preference for warehousing assets,particularly in the rapidly growing e-commerce and logistics subsectors.With

180、e-commerce set to continue its rapid expansion,the demand for modern,efficient warehouse spaces remains on the rise.Additionally,the growing need for optimized supply chains,coupled with advancements in technology,has fuelled further growth,particularly in Tier-II and Tier-III cities,where the pace

181、of infrastructure development is accelerating.Government initiatives like the National Logistics Policy and the creation of industrial corridors have significantly boosted investor confidence in the warehousing market.These measures aim to streamline logistics,reduce transportation costs,and improve

182、 infrastructure,creating a favourable environment for businesses to thrive.Despite these advances,challenges such as land acquisition and infrastructure bottlenecks persist,requiring attention to fully unlock the potential of the sector.In 2024,a shift in investment preferences was evident,with 98%o

183、f funds directed toward ready-to-use assets,indicating investor confidence in completed properties with immediate income-generation potential.Only 2%was allocated to under-construction projects.136%YoYWarehousing Sector led the investment space,received investments worth USD 1,877 mn in 2024.5063249

184、1,50012911334502004006008001,0001,2001,4001,6001,8002,00020242024Q1Q2Q3Q47971,877INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024-28-37 652 720 245 922 220 817 303-1-1 5 6 4 6 2 422011 2012 2013 2

185、014 2015 2016 2017 2018 2019 2020 2021 2022Amount invested(USD mn)Number of dealsPE Investments in RetailRetail Sector did not witness any deals post 2022Figure 19Cities Amount invested Number of deals(USD mn)Mumbai 1,664 9Bengaluru 512 2Pune 483 5Chandigarh 267 2Hyderabad 197 2NCR 192 2Ahmedabad 12

186、3 1Lucknow 115 1Chennai 106 2Nagpur,Amritsar 100 1Indore 61 2Bhubaneshwar 46 1Kolkata 77 1Grand Total 3,944 31Investor interest in the retail sector has expanded beyond major metros in last few yearsTable 2The retail sector saw limited PE investment activity in 2024 with no new deals recorded,largel

187、y due to global economic uncertainties and higher interest rates,prompting a cautious investor stance.However,a key development occurred with the acquisition of Vega City Mall in Bengaluru by Nexus Select Trust for USD 105.3 mn,signalling that prime retail assets still attract investor interest desp

188、ite broader market challenges.This deal highlights the resilience of high-quality retail properties which continue to appeal to investors seeking stable,long-term returns.The listing of a retail REIT is expected to bolster investor confidence and could pave the way for further listings,rejuvenating

189、the sector.Looking ahead,the retail sector is expected to gradually regain momentum.The listing of a retail REIT has already begun to inject confidence into the market,offering a regulated and transparent investment avenue.This could pave the way for further listings,potentially reinvigorating the s

190、ector and attracting new investments.As consumer spending rises and omnichannel retail strategies become more widespread,the long-term outlook for the sector remains positive.In conclusion,while 2024 may have seen a slowdown in retail PE investments,developments such as the Nexus Select Trust acquis

191、ition highlight the sectors potential.As the market adapts Source:Knight Frank Research Note:The Grand Total represents investments since 2011.Source:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 202423to changing consumer preferences and economic conditions,th

192、e retail sector is poised for recovery,with renewed interest from investors expected in the near future.Investment platforms remain optimistic about the growth prospects of the retail sector,particularly as retail sales rebound.The rise of e-commerce has no doubt transformed the retail landscape,but

193、 the relevance of physical stores,especially for experiential retail and luxury brands,remains undeniable.Furthermore,the growing trend towards organized retail formats,offering greater scalability and efficiency,presents lucrative investment opportunities.In the coming years,the retail sector is ex

194、pected to witness a resurgence in PE investments,driven by the rebound in retail sales,growing consumer spending,and the increasing adoption of omnichannel retail strategies.As investors become more comfortable with the evolving retail landscape and the opportunities presented by organized retail fo

195、rmats,the sector is poised for significant growth and transformation.In conclusion,as the sector adapts to changing consumer behaviour and embraces new technologies,it is poised to attract renewed interest from PE investors,contributing to its continued growth and evolution.22INVESTMENTS IN REAL EST

196、ATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024-28-37 652 720 245 922 220 817 303-1-1 5 6 4 6 2 422011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Amount invested(USD mn)Number of dealsPE Investments in Retai

197、lRetail Sector did not witness any deals post 2022Figure 19Cities Amount invested Number of deals(USD mn)Mumbai 1,664 9Bengaluru 512 2Pune 483 5Chandigarh 267 2Hyderabad 197 2NCR 192 2Ahmedabad 123 1Lucknow 115 1Chennai 106 2Nagpur,Amritsar 100 1Indore 61 2Bhubaneshwar 46 1Kolkata 77 1Grand Total 3,

198、944 31Investor interest in the retail sector has expanded beyond major metros in last few yearsTable 2The retail sector saw limited PE investment activity in 2024 with no new deals recorded,largely due to global economic uncertainties and higher interest rates,prompting a cautious investor stance.Ho

199、wever,a key development occurred with the acquisition of Vega City Mall in Bengaluru by Nexus Select Trust for USD 105.3 mn,signalling that prime retail assets still attract investor interest despite broader market challenges.This deal highlights the resilience of high-quality retail properties whic

200、h continue to appeal to investors seeking stable,long-term returns.The listing of a retail REIT is expected to bolster investor confidence and could pave the way for further listings,rejuvenating the sector.Looking ahead,the retail sector is expected to gradually regain momentum.The listing of a ret

201、ail REIT has already begun to inject confidence into the market,offering a regulated and transparent investment avenue.This could pave the way for further listings,potentially reinvigorating the sector and attracting new investments.As consumer spending rises and omnichannel retail strategies become

202、 more widespread,the long-term outlook for the sector remains positive.In conclusion,while 2024 may have seen a slowdown in retail PE investments,developments such as the Nexus Select Trust acquisition highlight the sectors potential.As the market adapts Source:Knight Frank Research Note:The Grand T

203、otal represents investments since 2011.Source:Knight Frank Research,Venture Intelligence*Investments considered till 10th December 202423to changing consumer preferences and economic conditions,the retail sector is poised for recovery,with renewed interest from investors expected in the near future.

204、Investment platforms remain optimistic about the growth prospects of the retail sector,particularly as retail sales rebound.The rise of e-commerce has no doubt transformed the retail landscape,but the relevance of physical stores,especially for experiential retail and luxury brands,remains undeniabl

205、e.Furthermore,the growing trend towards organized retail formats,offering greater scalability and efficiency,presents lucrative investment opportunities.In the coming years,the retail sector is expected to witness a resurgence in PE investments,driven by the rebound in retail sales,growing consumer

206、spending,and the increasing adoption of omnichannel retail strategies.As investors become more comfortable with the evolving retail landscape and the opportunities presented by organized retail formats,the sector is poised for significant growth and transformation.In conclusion,as the sector adapts

207、to changing consumer behaviour and embraces new technologies,it is poised to attract renewed interest from PE investors,contributing to its continued growth and evolution.22INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY

208、INVESTMENTS IN INDIA:202425Alternative Investment Funds(AIFs),regulated by the Securities and Exchange Board of India(SEBI),have emerged as a key driver of growth in the Indian real estate sector.These privately pooled investment vehicles allow investors to diversify their portfolios beyond traditio

209、nal assets such as stocks and bonds,offering access to non-conventional opportunities in private equity,venture capital,real estate,and more.From 2012 to December 2024,SEBI has registered approximately 1,434 AIFs,of which 56 focus on real estate,with a notable majority of 50 registrations occurring

210、after January 2021.This highlights the post-COVID boom in real estate activity and the growing appeal of AIFs as a capital channel in this sector.Since 2021,real estate-focused AIFs have announced plans to raise a total of USD 13.1 bn,of which USD 7.5 bn has already been raised,reflecting strong inv

211、estor confidence in Indias real estate market.These funds have focused predominantly on Tier-1 cities,investing across residential,commercial,and logistics segments,where demand continues to grow robustly.Fundraising Goal(USD bn)Amount Raised(USD bn)13.1 7.5Real Estate AIF Fundraising GoalTable 2Sou

212、rce:Company AnnouncementsBetween January 2021 and December 2024,Indian private equity(PE)funds have deployed USD 3.9 bn into real estate projects.However,with a cumulative fundraising of USD 7.5 bn,approximately USD 3.6 bn remains as dry powder,ready to be deployed in future investments.This sizable

213、 reserve positions the sector for robust growth in the coming years as the funds seek to capitalize on high-yield opportunities across residential,office,and warehousing segments.The emergence of AIFs signifies a structural shift in the investment landscape for Indian real estate.The infusion of cap

214、ital through these funds is driving innovation,fostering new project launches,and bolstering the sectors financial resilience.USD 3.6 bn waiting to be investedFigure 20121086420Amount invested by India Players(USD bn)Source:Knight Frank ResearchNote:Data considered from 1st Jan 2021 to 10th Dec 2024

215、3.93.6Amount Raised(USD bn)7.5Dry Powder(USD bn)vailable dry powder,Acoupled with expected return of foreign investment inflows,to spur growth going ahead.Global Trends Supporting Indian Real EstateRecent macroeconomic trends have further brightened the investment outlook for Indian real estate.Glob

216、al monetary policies,including the European Central Banks(ECB)interest rate cuts and the US Federal Reserves(Fed)potential move towards rate easing,are expected to redirect foreign capital flows into emerging markets like India.Coupled with attractive valuations in Indian real estate,this provides a

217、 compelling case for increased foreign participation.Indias real estate sector is well-positioned to benefit from this renewed investor interest.Prime locations and growth-oriented segments such as warehousing and office spaces,are expected to attract a significant share of capital.Furthermore,as We

218、stern economies stabilize and investor confidence rebounds,foreign inflows are likely to complement the domestic capital already raised,accelerating market activity.A Fertile Ground for GrowthThe convergence of domestic dry powder,global investor interest,and a conducive regulatory framework present

219、s an unprecedented opportunity for the Indian real estate market.Developers and investors alike stand to benefit from this synergy,with the potential to drive sustainable growth across key asset classes.Looking ahead,AIFs are expected to play an even larger role in shaping the real estate sector,fos

220、tering innovation,and catering to the evolving needs of a dynamic and increasingly globalized economy.24The AIF Revolution:Catalysing Growth in Indian Real EstateINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS

221、 IN INDIA:202425Alternative Investment Funds(AIFs),regulated by the Securities and Exchange Board of India(SEBI),have emerged as a key driver of growth in the Indian real estate sector.These privately pooled investment vehicles allow investors to diversify their portfolios beyond traditional assets

222、such as stocks and bonds,offering access to non-conventional opportunities in private equity,venture capital,real estate,and more.From 2012 to December 2024,SEBI has registered approximately 1,434 AIFs,of which 56 focus on real estate,with a notable majority of 50 registrations occurring after Janua

223、ry 2021.This highlights the post-COVID boom in real estate activity and the growing appeal of AIFs as a capital channel in this sector.Since 2021,real estate-focused AIFs have announced plans to raise a total of USD 13.1 bn,of which USD 7.5 bn has already been raised,reflecting strong investor confi

224、dence in Indias real estate market.These funds have focused predominantly on Tier-1 cities,investing across residential,commercial,and logistics segments,where demand continues to grow robustly.Fundraising Goal(USD bn)Amount Raised(USD bn)13.1 7.5Real Estate AIF Fundraising GoalTable 2Source:Company

225、 AnnouncementsBetween January 2021 and December 2024,Indian private equity(PE)funds have deployed USD 3.9 bn into real estate projects.However,with a cumulative fundraising of USD 7.5 bn,approximately USD 3.6 bn remains as dry powder,ready to be deployed in future investments.This sizable reserve po

226、sitions the sector for robust growth in the coming years as the funds seek to capitalize on high-yield opportunities across residential,office,and warehousing segments.The emergence of AIFs signifies a structural shift in the investment landscape for Indian real estate.The infusion of capital throug

227、h these funds is driving innovation,fostering new project launches,and bolstering the sectors financial resilience.USD 3.6 bn waiting to be investedFigure 20121086420Amount invested by India Players(USD bn)Source:Knight Frank ResearchNote:Data considered from 1st Jan 2021 to 10th Dec 20243.93.6Amoun

228、t Raised(USD bn)7.5Dry Powder(USD bn)vailable dry powder,Acoupled with expected return of foreign investment inflows,to spur growth going ahead.Global Trends Supporting Indian Real EstateRecent macroeconomic trends have further brightened the investment outlook for Indian real estate.Global monetary

229、 policies,including the European Central Banks(ECB)interest rate cuts and the US Federal Reserves(Fed)potential move towards rate easing,are expected to redirect foreign capital flows into emerging markets like India.Coupled with attractive valuations in Indian real estate,this provides a compelling

230、 case for increased foreign participation.Indias real estate sector is well-positioned to benefit from this renewed investor interest.Prime locations and growth-oriented segments such as warehousing and office spaces,are expected to attract a significant share of capital.Furthermore,as Western econo

231、mies stabilize and investor confidence rebounds,foreign inflows are likely to complement the domestic capital already raised,accelerating market activity.A Fertile Ground for GrowthThe convergence of domestic dry powder,global investor interest,and a conducive regulatory framework presents an unprec

232、edented opportunity for the Indian real estate market.Developers and investors alike stand to benefit from this synergy,with the potential to drive sustainable growth across key asset classes.Looking ahead,AIFs are expected to play an even larger role in shaping the real estate sector,fostering inno

233、vation,and catering to the evolving needs of a dynamic and increasingly globalized economy.24The AIF Revolution:Catalysing Growth in Indian Real EstateINVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2

234、024Source:Knight Frank Research2,451 1,133 2,030 2,222 4,565 5,082 7,619 7,803 6,581 3,945 6,199 5,357 3,137 4,1535,506 201120122013201420152016201720182019202020212022202320242025P201120122013201420152016201720182019202020212022202320242025P26OUTLOOKPrivate equity(PE)investments in Indian real esta

235、te have historically been a key driver of the sectors expansion,with trends reflecting the evolving macroeconomic landscape.Over the years,PE inflows have shown resilience,adapting to global challenges while capitalizing on emerging opportunities.The investment activity in Indian real estate showed

236、a robust recovery,growing from USD 3.1 bn in 2023 to USD 4.1 bn in 2024.While geopolitical tensions and high interest rates initially tempered investor enthusiasm,the resilience of the Indian economy and improving global conditions have begun to restore investor confidence.Indian real estate PE inve

237、stments projected to surge by 32%YoY to USD 5.5 bn in 2025Figure 21Chart 20:Factors impacting PE investments in India.Figure 22-100.0 200.0 300.0 400.0 500.0 600.02013201420152016201720182019202020212022202320242025 PPE InvestmentsInflation Govt Investments RBI Repo Rate USD INR Office SupplySource:

238、Knight Frank Research32%INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024Source:Knight Frank Research2,451 1,133 2,030 2,222 4,565 5,082 7,619 7,803 6,581 3,945 6,199 5,357 3,137 4,1535,506 2011201

239、22013201420152016201720182019202020212022202320242025P201120122013201420152016201720182019202020212022202320242025P26OUTLOOKPrivate equity(PE)investments in Indian real estate have historically been a key driver of the sectors expansion,with trends reflecting the evolving macroeconomic landscape.Ove

240、r the years,PE inflows have shown resilience,adapting to global challenges while capitalizing on emerging opportunities.The investment activity in Indian real estate showed a robust recovery,growing from USD 3.1 bn in 2023 to USD 4.1 bn in 2024.While geopolitical tensions and high interest rates ini

241、tially tempered investor enthusiasm,the resilience of the Indian economy and improving global conditions have begun to restore investor confidence.Indian real estate PE investments projected to surge by 32%YoY to USD 5.5 bn in 2025Figure 21Chart 20:Factors impacting PE investments in India.Figure 22

242、-100.0 200.0 300.0 400.0 500.0 600.02013201420152016201720182019202020212022202320242025 PPE InvestmentsInflation Govt Investments RBI Repo Rate USD INR Office SupplySource:Knight Frank Research32%INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024INVESTMENTS IN REAL ESTATET

243、RENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202428Based on Knight Franks investment forecasting model,private equity(PE)investments in India have shown a strong correlation with key factors such as government spending,currency fluctuations,inflation,interest rates,and office supply in recent years.

244、These variables have demonstrated significant explanatory power in influencing PE investment trends.Considering the projected movement of these variables over the next year,as per assumptions from key agencies and our analysis,we forecast a 32%year-on-year increase in PE investments in India,reachin

245、g USD 5.5 billion.REPORT AUTHORGRAPHICS&DESIGN Naresh SharmaAssistant Vice President-ResearchNaresh.SRakshit DubeyAssistant Manager-Design and GMUMBAI(HO)Shishir BaijalChairman and Managing DShishir Baijal Chairman&Managing Director,India Viral DesaiSenior Executive Director Occupier Strategy&Soluti

246、ons,Industrial&Logistics,Capital Markets and Retail AHarry Chaplin-Rogers Director of International Capital Markets ICAPITAL MARKETS2025A Rebound on the HorizonChartingthe FutureIndias real estate market is entering a phase of renewed optimism as domestic and international investors recalibrate thei

247、r strategies to align with the evolving market dynamics.With USD 5.5 bn of projected investments in 2025,the sector is set to maintain its growth trajectory,supported by a combination of government policy measures,resilient demand,and attractive valuations.The road ahead may still present challenges

248、,but the sectors ability to adapt and capitalize on opportunities underscores its potential to deliver sustainable returns for investors.As global and domestic capital flows converge,the Indian real estate market is well-positioned to emerge as a preferred destination for private equity investments

249、in the coming years.INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024Anand PatilNational Director-Occupier Strategy and Solutions(NCR&Kolkata)and Industrial&Logistics(NCR)P VilasNational Director-Occupier Strategy&Solutions,Industrial&Logistics,Capital Markets,and Branch H

250、ead(Pune)Srinivas AnikipattiExecutive Director-Tamil Nadu&KShantanu MazumderExecutive Director-BRumit ParikhBranch Head(Ahmedabad)Senior Director -Occupier Strategy and Solutions,Industrial&Logistics and RRumit ParikhBranch Head(Ahmedabad)Senior Director -Occupier Strategy and Solutions,Industrial&L

251、ogistics and RMudassir ZaidiExecutive Director-N28Based on Knight Franks investment forecasting model,private equity(PE)investments in India have shown a strong correlation with key factors such as government spending,currency fluctuations,inflation,interest rates,and office supply in recent years.T

252、hese variables have demonstrated significant explanatory power in influencing PE investment trends.Considering the projected movement of these variables over the next year,as per assumptions from key agencies and our analysis,we forecast a 32%year-on-year increase in PE investments in India,reaching

253、 USD 5.5 billion.REPORT AUTHORGRAPHICS&DESIGN Naresh SharmaAssistant Vice President-ResearchNaresh.SRakshit DubeyAssistant Manager-Design and GMUMBAI(HO)Shishir BaijalChairman and Managing DShishir Baijal Chairman&Managing Director,India Viral DesaiSenior Executive Director Occupier Strategy&Solutio

254、ns,Industrial&Logistics,Capital Markets and Retail AHarry Chaplin-Rogers Director of International Capital Markets ICAPITAL MARKETS2025A Rebound on the HorizonChartingthe FutureIndias real estate market is entering a phase of renewed optimism as domestic and international investors recalibrate their

255、 strategies to align with the evolving market dynamics.With USD 5.5 bn of projected investments in 2025,the sector is set to maintain its growth trajectory,supported by a combination of government policy measures,resilient demand,and attractive valuations.The road ahead may still present challenges,

256、but the sectors ability to adapt and capitalize on opportunities underscores its potential to deliver sustainable returns for investors.As global and domestic capital flows converge,the Indian real estate market is well-positioned to emerge as a preferred destination for private equity investments i

257、n the coming years.INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2024Anand PatilNational Director-Occupier Strategy and Solutions(NCR&Kolkata)and Industrial&Logistics(NCR)P VilasNational Director-Occupier Strategy&Solutions,Industrial&Logistics,Capital Markets,and Branch He

258、ad(Pune)Srinivas AnikipattiExecutive Director-Tamil Nadu&KShantanu MazumderExecutive Director-BRumit ParikhBranch Head(Ahmedabad)Senior Director -Occupier Strategy and Solutions,Industrial&Logistics and RRumit ParikhBranch Head(Ahmedabad)Senior Director -Occupier Strategy and Solutions,Industrial&Lo

259、gistics and RMudassir ZaidiExecutive Director-NWe like questions,if youve got one about our research,or would like some property advice,we would love to hear from you.RESEARCH Vivek RathiNational Director-RPiyali DasguptaNational Director-Corporate Marketing&Public RCORPORATE-MARKETING&PUBLIC RELATI

260、ONSThe statements,information,data and opinions expressed or provided herein are provided on“as is,where is”basis and concerned parties clients are required to carry out their own due diligence as may be required before signing any binding document.Knight Frank(India)Private Limited(KFIPL)makes no w

261、arranties,expressed or implied,and hereby disclaims and negates all other warranties,including without limitation,implied warranties or conditions of merchantability,fitness for a particular purpose,or non-infringement of intellectual property or other violation of rights including any third party r

262、ights.Further,KFIPL does not warrant or make any representations concerning the accuracy,likely results,or reliability of the use of the statements,information and opinions as specified herein.The statements,information and opinions expressed or provided in this presentation/document by KFIPL are in

263、tended to be a guide with respect to the purpose for which they are intended,but in no way shall serve as a guide with regards to validating title,due diligence(technical and financial),or any other areas specifically not included in the presentation.Neither KFIPL nor any of its personnel involved a

264、ccept any contractual,tortuous or other form of liability for any consequences,loss or damages which may arise as a result of any person acting upon or using the statements,information,data or opinions in the publication,in part or full.The information herein shall be strictly confidential to the ad

265、dressee,and is not to be the subject of communication or reproduction wholly or in part.The document/presentation is based on our understanding of the requirement,applicable current real estate market conditions and the regulatory environment that currently exists.Please note:Any change in any one o

266、f the parameter stated above could impact the information in the document/presentation.In case of any dispute,KFIPL shall have the right to clarify.Knight Frank Research Reports are available to download at REAL ESTATEJanuary-March 2024INDIA REAL ESTATEJuly-December 2023INVESTMENTS IN REAL ESTATE-2023INDIA REAL ESTATEJamuary-June 2023