Office sector dominates: Indian real estate attracts $5.4 billion in institutional investments

January 1, 2024

In 2023, Institutional investments in the Indian real estate sector reached $5.4 billion, marking a 10 per cent YoY increase, according to Colliers India.

Foreign investments maintained dominance, constituting 67 per cent of total inflows, while domestic investments surged by 66 per cent to $1.7 billion.

The office sector led with a 56 per cent share in total inflows, attracting global and domestic capital.

Despite overall stability, Q4 witnessed a 37 per cent YoY drop in investments, totalling $0.8 billion. Alternatives claimed a 51 per cent share in Q4 inflows, reflecting strong demand in segments like data centres, student housing, life sciences, and schools.

While global investment markets faced challenges, India remained a fast-growing economy, sustaining investor confidence. Although US inflows declined from 2020 levels, Canada and Singapore emerged as leading sources of foreign capital, contributing 78 per cent of global real estate inflows into India in 2023.

Notably, APAC countries increased their investment inflows 3.6 times compared to 2020, with investors favouring India due to its robust economic performance, improved regulatory framework, and sustained demand across real estate segments.

Piyush Gupta, Managing Director at Colliers India, highlighted the positive trend, stating, “As India’s real estate sector concludes another promising year, institutional investments increased by 10 per cent to USD 5.4 billion—the highest since 2020. Investments diversified across education, shared spaces, and data centres, contributing to a strong domestic upcycle in office, residential, and industrial areas. Looking ahead to 2024, investment activity is expected to remain robust, supported by strong domestic economic fundamentals, with technology and ESG factors playing key roles in investment decisions.”

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