October 26, 2023: Residential assets attracted $298.3 million of institutional investments during the July-September period, up 71% from the year-ago period, according to real estate consultant Vestian. Institutional investments in residential assets stood at $174.3 million in the year-ago period.
Institutional investment by asset type |
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| Asset Type | Q3 2022 ($ million) | Q3 2023 ($ million) | Q3 2022 (% share) | Q3 2023 (% share) | Y-O-Y % Changes (Q3 2023 vs Q3 2022) |
| Residential | 174.3 | 298.3 | 47% | 44% | 71% |
| Commercial | 150 | 164.1 | 40% | 24% | 9.4% |
| Industrial & warehousing | 0 | 190.3 | 0% | 28% | _ |
| Diversified | 50 | 27.2 | 13% | 4% | -46% |
Commercial assets include office, retail, co-working, and hospitality projects.
(Source: Vestian Research)
“Overall, the Indian real estate sector received institutional investments worth $679.9 million during the third quarter of 2023, up 82% from the same period last year when inflow was $374.3 million, the report said.
| Quarters | Institutional Investments (USD Bn) | Q-o-Q Change (%) | Y-o-Y Change (%) |
| Q3 2022 | 0.4 | -86% | -53% |
| Q4 2022 | 1.5 | 316% | 103% |
| Q1 2023 | 1.2 | -19% | -9% |
| Q2 2023 | 1.6 | 28% | -41% |
| Q3 2023 | 0.7 | -57% | 84% |
(Source: Vestian Research)
The share of domestic investors accounted for 71% of total institutional investments received in Q3 2023. On the other hand, the share of foreign investors reduced to 27% in Q3 2023 from 55% in Q3 2022. However, the total institutional inflow in the July-September period fell 57% when compared to the previous quarter due to a significant decline in foreign fund inflow.
“Institutional investments have slowed down during the September quarter due to limited interest from foreign investors amid a challenging global macroeconomic landscape,” Vestian CEO Shrinivas Rao said. He added that large conglomerates are calling their employees back to the office which may inflate demand for office spaces across the country.
“As a result, upcoming quarters may witness increased investments on the back of this renewed demand from the office sector,” he said.
Across various asset class, residential sector attracted the highest institutional investments during the third quarter of this calendar year, although the share has reduced to 44% in Q3 2023 from 47% a year earlier. Share of commercial assets (office space, co-working, retail, and hotels) declined to 24% in Q3 2023 from 40 per cent in Q3 2022.
Office assets attracted $164.1 million worth of institutional investments during July-September as against $150 million in the year-ago period. On the other hand, share for the industrial and warehousing sector increased significantly to 28% in Q3 2023 from a negligible share in Q3 2022.
The government’s push for the ‘Make in India’ campaign and the growing popularity of e-commerce resulted in increased demand for industrial spaces and warehouses across the country, said the report adding that this led to significant interest from large investors.
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
sunita.mishra@proptiger.com
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