Private equity investments inflows into the Indian real estate sector stood at $4.3 billion (approximately Rs 356 billion) during 2024, reflecting a 10% increase year-on-year (YoY). According to the latest data by property consulting firm Savills India, foreign institutional investors accounted for 88% of the total investment activity in 2024, reinforcing their dominant role in driving growth in the sector.

With its critical role in the economy, the housing sector is projected to contribute 13 per cent to the national GDP by 2025, as tier 2 and 3 cities emerge as pivotal growth hubs for the sector, according to a report on Tuesday. "Tier 2 and 3 cities are emerging as pivotal growth hubs, with smaller urban centres like Jaipur, Indore, and Kochi driving more than 40 per cent of new housing developments by 2025," said Ritesh Mehta, senior director and head (north and west), residential services and developer initiative, JLL India.

The GST Council’s decision to retrospectively amend the Central Goods and Services Tax (CGST) Act to restrict input tax credit (ITC) on construction services for commercial real estate such as malls, shops, etc, for leasing could push project costs and increase rents, said experts. Developers could also move court against the  amendment, experts added.

Led by increasing digitalisation as organisations increase their investments in cloud storage, India's data centre capacity is set to more than double to 2-2.3 GW by 2026-27, a December 23 report by Crisil Ratings said.

To support the strong demand, the incremental capital expenditure would be supported by a higher proportion of debt funding, which will result in a moderate increase in debt levels, it said.

Logistics & Industrial (L&I) real estate sector leasing volume for 2024 is expected to close in the range of 50-53 million square foot (msf), according to data from Cushman &Wakefield, a global commercial realty services firm.

As of October 2024, the leasing volume  surpassed 41 msf across the top-eight real estate markets in the country. Cities such as Pune, Chennai and Bengaluru continue to lead leasing demand with healthy leasing volumes in past few years.

Infrastructure projects in the Navi Mumbai area are driving the residential real estate market in the region as the annual housing stock in the vicinity of Navi Mumbai’s Airoli is expected to cross 1.85 lakh units by 2030, according to a report by Liases Foras, a real estate consultancy firm.

The report stated that the real estate growth in Airoli can be attributed to robust connectivity, competitive and economical property prices, proximity to key business hubs, and easy access to essential social infrastructure.

Property values in the National Capital Region (NCR) have shown significant increase in a rather short time span as the country’s rich continue to pour millions in this highly-promising residential market, inspired by lifestyle aspirations.

Rising income levels combined with a strong macroeconomic environment has led to sizeable demand growth for luxury hospitality. A report by hospitality advisory firm HVS ANAROCK states that the luxury hospitality segment is full of opportunities as demand will outpace supply in the segment between FY2024 and 2028. It adds that the existing stock represents only 17 percent (29,000 keys) of the overall Indian branded hotel stock.

India's real estate sector has witnessed a historic surge, with equity inflows reaching an unprecedented $8.9 billion in the first nine months of 2024, marking a 46% increase compared to the previous year, as per a CBRE report. Forecasts suggest equity investments could soar to $10-11 billion by the end of the year, driven by heightened interest in tier-II and tier-III cities. Delhi-NCR led the way, attracting 26% of total investments, followed closely by Mumbai and Bengaluru.

Around 40 per cent of India's population, equivalent to 60 crore people, is expected to reside in urban areas by 2030. Anticipating the growing need for quality urban infrastructure, India is expected to invest over Rs143 lakh crore in infrastructure by 2030. Most of this expenditure is to be directed towards urban clusters, driving significant activity in infrastructure-led urban development.