Institutional Investments In Real Estate Fall 40 Per Cent In Jan-March: Colliers India

The real estate consultant found that institutional investment in the sector declined 40 per cent to $995.1 million, against $1,658.3 million funds received in the same quarter a year earlier

The data highlighted that foreign funds accounted for 55 per cent of the overall institutional investment, while the remaining 45 per cent came from domestic investors

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The real estate sector in India saw a decline in institutional investments in the January to March quarter, data from Colliers India revealed. The real estate consultant found that institutional investment in the sector declined 40 per cent to $995.1 million, against $1,658.3 million funds received in the same quarter a year earlier. 

This decline in investments was attributed to a reduced inflow of funds in office, residential, and warehousing assets, the study found. Further, the data highlighted that foreign funds accounted for 55 per cent of the overall institutional investment, while the remaining 45 per cent came from domestic investors, reported PTI. 

The data found that in the office category in the sector, institutional investments plunged 38 per cent to $563 million in the quarter under review, down from $907.6 million in the same period a year earlier. The residential category clocked a 72 per cent decline in the investments to $102.6 million, from $361.1 million received in the January-March quarter in 2023. 

The industrial and warehousing assets attracted institutional investment worth $177.7 million, against $216.3 million funds received, down by 18 per cent on a year-on-year (YoY) basis. Alternate assets including data centres, senior housing, holiday homes, schools, and student housing, among others saw an inflow of $21 million in the reviewing quarter, marking a sharp plunge of 87 per cent form $158.2 million funds received in the same period a year earlier.

The only increase was seen in mixed use projects which received a funding of $130.8 million in January-March, against $15.1 million funds clocked in the same quarter a year earlier. 

Amongst the cities, Hyderabad and Pune accounted for 26 per cent each in the overall investments, while Bengaluru attracted 20 per cent of the funds. Elaborating on the findings, Piyush Gupta, MD, Capital Markets and Investment Services, Colliers India, said, “At $1 billion, institutional investments into Indian real estate have started on a steady positive note. Domestic investors are increasingly gaining more ground in Indian real estate. Within domestic institutional investments, office and residential assets formed about 66 per cent, reflecting a strategic approach to align with India's growth trends. This also underscores growing confidence of diversified spectrum of investors across multiple investment strategies including credit and acquisitions.”