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Institutional investments in Indian real estate surged by 45 per cent to nearly USD 1.15 billion during the July to September period, driven by high demand for premium homes and offices, as reported by Colliers. The office segment alone attracted USD 616.3 million, significantly outperforming last year's figures. The residential sector also saw a 40 per cent increase in investments, while the industrial and warehousing sectors faced a sharp decline. Domestic investments remained robust at USD 0.5 billion, with consistent institutional flows indicating strong investor confidence in the market.
Institutional investments in real estate rose by 45 per cent to nearly USD 1.15 billion during the July to September period, as investors aimed to capitalise on the strong demand for premium homes and offices, according to data from Colliers. The consultant reported that institutional investments in real estate during this timeframe amounted to USD 1,148.7 million, compared to USD 793.4 million in the corresponding period last year. Advertisement
Among various asset classes within the overall real estate market, the office segment attracted USD 616.3 million during the third quarter of this calendar year, marking an increase of more than seven times from USD 79.1 million in the same period last year. Colliers' data indicated that Chennai and Mumbai accounted for approximately 57 per cent of the total inflows during Q3 2024, bolstered by significant acquisitions in the office sector.
The residential segment has experienced a notable rise in demand following the Covid-19 pandemic, seeing a 40 per cent increase in investments to USD 384.8 million, up from USD 274.6 million. Conversely, the industrial and warehousing sector experienced a decline of 72 per cent in fund inflows, dropping to USD 95.2 million from USD 340.3 million. Investments in mixed-use projects nearly doubled, reaching USD 52.4 million from USD 27.2 million. Meanwhile, alternative assets, which encompass data centres, life sciences, senior housing, holiday homes, student housing, and schools, did not receive any funding during the July to September period, in contrast to USD 72.2 million in the same timeframe last year.
Colliers noted that domestic investments remained strong at USD 0.5 billion, representing 44 per cent of the inflows during the July to September quarter. Piyush Gupta, Managing Director of Capital Markets and Investment Services at Colliers India, remarked that institutional flows in Indian real estate have remained consistent, reflecting sustained investor confidence. He added that investors are well-diversified between global and domestic capital, stating that while office assets continue to be a primary focus, industrial, warehousing, and residential segments are also gaining significant momentum.
The significant growth in institutional investments in Indian real estate reflects a robust market dynamic, particularly in the office and residential segments. Despite challenges faced by the industrial and warehousing sectors, the overall positive trend underscores strong investor confidence. The data from Colliers highlights the increasing diversification of capital sources and the sustained interest in premium assets. As the market continues to evolve, it remains crucial for stakeholders to adapt to emerging opportunities, ensuring that they capitalise on the momentum generated by shifting demand patterns in the post-pandemic landscape.
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