Institutional investments in real estate jump 61% in 2024; see challenges this year: Vestian

Institutional investments in Indian real estate rose 61% to $6.8 billion last year but attracting funds could be challenging in 2025 due to global uncertainties, according to Vestian.

Institutional investments stood at $4.3 billion in 2023, real estate consultant Vestian said in a statement.

Shrinivas Rao, CEO of Vestian, said, "Despite a slow start, the real estate sector received significant institutional investments in 2024, surpassing pre-pandemic levels."

However, Rao said, "2025 is expected to be challenging due to increasing geopolitical friction, a slowdown in the global economy, and elevated inflation levels."

Out of the total institutional investments, the residential sector reported investments worth $2 billion, accounting for 30% of the share.

Investments in the housing segment rose by 171% in 2024 over the previous year.

Commercial assets, which include office, retail, co-working, and hospitality projects, received 35% of the total institutional investments while industrial and warehousing parks 28%.

Foreign investors put 54% of the total investments, while domestic funds were 30%, and the remaining 16% was co-investment.

"Interestingly, co-investments gained traction in 2024 as foreign investors relied on the local expertise of domestic investors amid prevailing macroeconomic uncertainty," Vestian said.

Rao said institutional investment in Indian real estate could get a boost if the RBI reduces the repo rate in 2025.

"Heightened real estate activities due to low mortgage rates may attract investors," he added.

US-based Vestian is one of the leading real estate consultants globally. Vestian has offices across US, India, China, UK, Sri Lanka and the Middle East.