Chennai: Despite the general gloom in the funding space, institutional investments in real estate remained strong during the first quarter of calendar year 2023 at $1.7 billion, which was 37 per cent higher than the corresponding period in 2022, according to Colliers India.
Against $1.2 billion in the March quarter of 2022, investment went up to $1.7 billion and the office sector continued to drive the investment inflows accounting for 55 per cent of the total inflows during the quarter. It was followed by the residential sector at 22 per cent share.
Investment inflows in the office sector rose by 41 per cent YoY at $0.9 billion, led by select large deals. Owing to the strong growth prospects in the office sector, key institutional investors are entering into strategic partnerships to strengthen their presence and expand their office portfolio in India.
Different cities demonstrated diverging trends in terms of investments.
Investments into Bengaluru projects went up multi-fold from $16.7 million to $196 million. Delhi NCR too witnessed 191 per cent growth. However, Chennai and Hyderabad saw nil investments and Mumbai saw a decline of 86 per cent. Larger markets such as Delhi-NCR and Bengaluru attracted 1/3rd of the total investments during the quarter, led by increased activity in these markets.
However, the majority of the inflows (63 per cent) were through multi-city deals. Investments from domestic investors rose 4X YoY during the quarter. Domestic investors remained committed towards residential assets during the quarter, despite higher lending rates. On the other hand, global investors remained inclined towards office and industrial assets, and dominated the total investment inflows at 76 per cent share.
