Institutional Investments in Indian Real Estate Rise 11% in Q3, Driven by Strong Office Asset Demand

New Delhi, October 7: During the July-September quarter, institutional investments rose 11% YoY to USD 1.27 billion in India’s real estate sector. The increase in institutional investments was largely driven by a jump in investments into office assets, according to data released by Colliers India. According to the report, the total investment stood at USD 1,269.5 million, up from USD 1,148.7 million in the same period last year.

Domestic Investors Lead the Investments at USD 762.4 Million

The investments by domestic investors stood at USD 762.4 million. This represents 60% of the total quarterly investments. On the other hand, foreign investors invested a total of USD 507.1 million. The investments by domestic investors saw a 51% increase YoY, while the investments by foreign investors were down by 21%.

“Domestic capital contributed 60 per cent of the quarterly inflows, with strong interest in office and residential segments. Office assets accounted for over three-fourths of the domestic investments, indicating a continued appetite for both ready and developmental commercial properties,” said Badal Yagnik, CEO, Colliers India.

Office Assets Favourite Investment Segment

The office segment remained the top performer when it came to investments by both domestic and foreign investors. The segment attracted USD 779.9 million in institutional inflows during the July-September quarter. This is a 27% rise compared to USD 616.3 million a year earlier.

On the other hand, the investments in the residential segment declined 17% YoY to USD 319.7 million, down from USD 384.8 million a year ago.

Steady Growth in Institutional Investments A Great Sign

Commenting on the investment sentiment, Ankur Jalan, CEO of Golden Growth Fund, said: “The steady growth in institutional investment underscores strong investor confidence, backed by robust demand across real estate asset classes”. “With rationalisation of income tax and GST, and declining interest rates—factors expected to boost consumption and GDP—investor confidence in India’s real estate sector is set to remain strong,” Jalan added.

Investment Momentum to Remain Steady

Colliers expects that the investment momentum in the real estate sector from both domestic and foreign investors will remain steady in the coming quarters. The expectation is despite foreign investors showing caution for investments amid geopolitical tensions and economic uncertainties. Meanwhile, domestic investors are likely to keep increasing their investments in the coming quarters.

Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations