Hyderabad: The Indian real estate attracted private equity (PE) investment of $3 billion in the first half of 2024, recording an increase of 15 per cent y-o-y from $2.6 billion in H1 2023. Of the total, Hyderabad received about 12 per cent of private equity investment at $357 million. About 74 per cent of this investment was deployed in the office sector amounting to $265 million, made by an Asian PE investor, while the residential sector received $92 million from domestic investors, an international property consultant said.

Knight Frank India on Wednesday released its latest report - Trends in Private Equity Investment in India: H1 2024. The company took into account the top six metro cities. Hyderabad, Bengaluru and NCR emerged as leading investment destinations for office investments in H1 2024. Hyderabad received the largest volume of investments at 45 per cent of the total PE investments in office sector.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “India has been favourably viewed for investments, especially in the last decade, due to economic stability and growth. However, recent economic conditions and higher inflation have led funds from western economies to adopt a wait-and-see stance. Yet, Indian commercial real estate continues to thrive due to factors like return to work, rising office absorption and strengthening rental values.”

The report cited a shift in investor dynamics and sectoral preference for private equity investments into Indian real estate sector. The office sector, which received the highest share of PE Investments since 2018, was surpassed by the warehousing sector. Warehousing sector accounted for largest share of 52 per cent of total PE investments in January – June 2024, followed by residential with 29 per cent and office at 20 per cent.

The warehousing sector received $1,532 million investment. PE investors are actively engaged in the warehousing market, particularly targeting subsectors such as e-commerce, logistics, and 3PL (third-party logistics) facilities, the report further said.