India Witnesses Surge in Industrial and Warehousing Investments in Q2 2024
Industrial and warehousing segment accounted for 61% of total investments in Indian real estate in Q2 2024, driven by select large deals.
Industrial InvestmentsWarehousing InvestmentsIndia Real EstateColliers IndiaForeign InvestmentsReal Estate NewsJul 07, 2024
After a steady start in Q1 2024, Q2 2024 saw accelerated momentum, registering $2.5 billion of inflows in overall real estate—the highest in any quarter since 2021. This surge in industrial and warehousing investments resulted in a robust investment volume of $3.5 billion for the first half of 2024, compensating for the slow start in the first quarter.
Foreign investments remained strong, constituting 81% of the total inflows in Q2 2024, primarily led by investors from the US and UAE. Institutional investments in the industrial and warehousing segment rose significantly, increasing 11 times compared to Q2 2023, driven by several large deals.
Amidst rising demand for superior quality grade A supply and evolving supply-chain models, investor confidence in the segment has significantly improved. With healthy demand momentum, both global and domestic investors are expected to play a prominent role in consolidating industrial and warehousing assets in India.
Amidst the significant growth in e-commerce and retail consumption in India, various asset-level investors are likely to enter the market, further boosting demand for AI-enabled warehouses and micro-fulfilment centres in the upcoming quarters. Multi-city deals continued to dominate investment inflows, accounting for 72% of the total during Q2 2024. Bengaluru and Delhi NCR together represented about 23% of the total inflows during the quarter, driven by foreign investments.
Vimal Nadar, senior director and head of research at Colliers India, stated that driven by foreign investments, the industrial and warehousing segment witnessed about half of the total inflows in the first half of 2024. He added that with India's manufacturing purchasing managers' index staying close to 60 in the last few months, investor confidence in the industrial and warehousing segment is likely to remain strong throughout 2024.
Furthermore, strategic infrastructure projects such as Dedicated Freight Corridors and Bharatmala, as well as robust government policies such as the National Logistics Policy, underscore substantial long-term growth opportunities for the industrial and warehousing segment in India.
Frequently Asked Questions
What was the share of industrial and warehousing investments in Indian real estate in Q2 2024?
61% of total investments
What was the total investment in overall real estate in Q2 2024?
$2.5 billion
What was the increase in institutional investments in the industrial and warehousing segment in Q2 2024 compared to Q2 2023?
11 times
Which cities dominated investment inflows in Q2 2024?
Bengaluru and Delhi NCR
What is expected to drive demand for industrial and warehousing assets in India?
Growing e-commerce and retail consumption
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