Institutional investments in Indian real estate touched $4.6 bn during January-September 2023, a 27% YoY increase, highlighting the resilience and attractiveness of the market despite prevailing global challenges.
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The total institutional investment for the first nine months of the year 2023 have reached 93% of the total inflows recorded in 2022, despite a clouded global economic environment, mentioned the report.
The India office segment continued to attract more capital followed by residential and warehousing. Investment inflows in the office sector rose 1.6X y-o-y during Jan-September 2023, at $2.9 billion, led by select large deals in the sector. The other asset class like industrial assets and residential substantial investors interest.
Some of the large deals closed recently include Brookfield India Real Estate Investments Trust and GIC investing $14000 in office assets, Pragati Group raising $200 million from a Singapore based fundand HDFC Capital Advisors invested over $182 mn with the house of Abhinandan Lodha.
“At a time when major global economies are weighed down by inflation woes, rising cost of capital and growth uncertainty, India’s real estate market stands strong, by navigating through difficult market conditions. The resilience of the market can be gauged in terms of heightened deal activity and amount of capital allocated across diverse asset classes. While some volatility and uncertainty will remain in the short-term, the industry is well positioned for a robust 2023 and beyond,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.
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According to the Colliers report, investors are also actively forming large joint venture (JV) platforms to capitalize on emerging opportunities and participate in existing as well as upcoming office projects.
Domestic investors have become more active in the market, contributing 23% of the total investments during this period, compared to an 18% share in the same period in 2022, infusing the majority of the funds into the residential sector. However, foreign investments maintained their lead during Jan-Sep 2023, accounting for a 77% share of total investments with $3.5 billion inflows, a 47% y-o-y surge compared to the same period last year.
“The Indian real estate sector continues to demonstrate its allure as a resilient and promising investment destination, with both domestic and international investors showing relentless commitment to participate in its high growth phase.. About half of the total investments by domestic investors was directed towards residential assets during the period. This renewed interest in residential assets backed by stable interest rates is expected to drive heightened activity during the upcoming festive season; resonating upbeat confidence amongst investors, developers & homebuyers alike.” said Vimal Nadar, senior director and head of research, Colliers India.
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Going ahead India’s sturdy economic growth, and a continued strong positive play of high performance economic and market indicators are likely to keep the long-term confidence high amongst global and domestic investors leading to more capital inflows in the country.
