Real Estate Year-Ender 2024: Charting a Growth Path
Despite macro-economic challenges and global headwinds, the real estate sector in 2024 has showed great resilience, and building on the strong foundation of 2023, the best performing year across asset classes, it is turning out to be a creditable year for the sector’s growth.
Vinod Behl

The year 2024 started on a positive note with the return of Modi-led NDA government, signaling the continuance of reformist policies, conducive for the growth of the real estate sector. The FY 25 Budget, despite some misses, provided a positive push to the realty sector with an INR 10 lakh crore investment boost to middle-class housing under PMAY 2.0, besides a big infrastructural push with a massive INR 11.11 lakh crore funding. The extension of Smart Cities Mission, the push to transit-oriented development in over a dozen large cities, brownfield redevelopment in 100 large cities, and the push for rental reforms, were other positive measures for sustainable growth of the real estate sector.
Robust Investment
That 2024 was a year of resurgence, is also evident from the robust investment inflows into the sector. It was a mega year for real estate IPOs as a record INR 135 billion were raised during the year, almost double the amount raised in 2023. Going forward, the IPO environment in 2025 remains favourable. Real estate accounted for 17% of QIPs in the first 9 months of the year, raising over INR 12,800 crore. According to international property consultancy JLL data, investment inflows in H1 24 rose to a record USD 4.8 billion – about 81% of the inflows received in the entire 2023. According to CBRE-CII report, equity investments in the Indian real estate market are poised to surpass the USD 10 billion mark. As of September this year, INR 8.9 billion worth of investments were received.
Residential Realty
The residential real estate's dream run continued till September quarter when sales got tempered ahead of festive quarter due to rising property prices and continuous high interest rates. According to an Anarock study, average home prices rose by up to 90% in some micro markets over the last 5 years on account of buoyant demand and increased new supply. PropEquity data shows that housing prices in the NCR surged by 137% between 2019 and September 2024.
Luxury Housing
The year saw residential realty riding high on luxury/super-luxury housing amidst shift towards more expensive residential properties as buyers preferred larger homes. The luxury housing share of new supply and sales went up from 11% in 2019 to 25% in 2024. The upsurge in service living also led to the popularity of branded residences. Alongside the phenomenal rise of luxury and super-luxury housing, affordability took a hit as unfortunately, the phenomenal rise of luxury housing was at the cost of affordable housing, which saw its share of new supply dropping from 40% in 2019 to 18% in 2024, and the sales share dropped by 50%.
Big-branded developers, both listed and non-listed, were the major drivers of high-end housing. Dominating the market, they took away the largest share of housing sales. Banking on their good track record, financial strength, big expansion plans, and a pipeline of new projects, they will continue to rule the residential real estate market in 2025.
Office Realty
The office market gave a stellar performance on account of record leasing, rising rental rates, and continued increase in new supply, amidst surging IT-BPM, Flexible workspaces and BFSI segments. The office demand in 2024, according to Savills, is expected to top 70 million sq ft. Global Capability Centers (GCCs), besides flexible spaces, turned out to be major growth drivers of office realty. According to CBRE, GCCs are set to garner a sizable 40-45 msf of leasing in FY 25, making for 35-40% of total office leasing. The office absorption by GCCs is estimated to reach 26 million sq ft by 2027 as per Knight Frank - 3AI report.
The year saw flex space contributing significantly to the growth of office real estate. Tier 2 cities are fast coming up as the next frontier for the office sector with several cities like Chandigarh, Jaipur, Lucknow, Coimbatore, Kochi, Thiruvananthapuram, Visakhapatnam, Ahmedabad, Indore, and Bhubaneswar emerging as new centres for office operations. Flexible space stock is set to reach 80 million sq ft by 2024-end.
In 2024, green-certified office space was the cynosure of occupiers with Bengaluru and Mumbai recording the highest leasing in green-certified buildings. Colliers puts about 70% of new supply as green-certified. Going forward, amidst favourable trends, the office market outlook exhibits buoyancy on all key parameters: leasing, supply, and rent.
Retail Sector
The retail sector too gave a good performance in 2024 with brands embarking on expansion into untapped micro markets with newer formats. The year saw Delhi's Khan Market emerging as India's priciest retail street ranked 22nd globally, with 7% YoY growth in rentals, as per Cushman & Wakefield. The retail space leasing, according to Savills India, is set to top 60-62 million sq ft by the end of 2024, a 22% increase from last year. JLL data indicates that the total retail real estate stock is likely to grow by 50% at 134 million sq ft by the end of 2028.
The trend of large retail developments (average size of over 5 lakh sq ft), incorporating entertainment, leisure and dining options, will continue through 2025. Going forward, the ongoing trend of experiential retail developments is set to transform the retail space, with retail supply expected to increase by one-third over the next 5 years.
Alternate Realty
It was an equally rewarding year for Alternate Realty. The ongoing data centre boom will see the industry touch the 1645 MW capacity by 2026, at an investment of USD 5.7 billion. In H1 2024, data centre capacity had reached 942 MW , registering a 21% increase over the same period in 2023. ICRA expects India's operational data centre capacity doubling to 2000-2100 MW by FY 27 at an investment of INR 50,000-55,000 crore. Between the second half of 2024 and 2026, the capacity will be expanded from 917 MW to 1521 MW.
Industrial Parks & Warehousing Space
Strong micro-economic indicators and healthy industrial activity amidst government push to manufacturing and large industrial parks, provided significant momentum to the industrial and warehousing market, with supply infusion exceeding the demand for Grade A warehousing space. Delhi-NCR and Chennai were major drivers, with 3PL players continuing to be the top occupiers of large warehousing spaces. In the first nine months of 2024, 20 million sq ft of leasing was done at 17% YoY increase. According to JLL, overall demand for warehousing space is estimated to hit 1.2 billion sq ft by 2027.
Logistics
Government's successful focus on manufacturing resulted in healthy demand in logistics. According to Knight Frank, a robust business environment, diversified warehousing demand, and growing institutional interest, are likely to help the logistics market regain momentum in the near-to-medium term. Delhi-NCR hit headlines by occupying a place among the top 10 APAC logistics markets, with a yearly rental growth of 3%, surpassing APAC's average year-on-year rental growth of 2.4%.
Going forward in 2025, favourable economic forecast and the much-awaited cut in interest rates, bode well for the real estate sector. But the moot question is: will the high property prices sustain and will affordable housing regain its lost mojo?