Institutional Investments in Real Estate Decline 37% in October-December to $822 Million: Colliers

Institutional investments in real estate fell 37 per cent annually in the October-December quarter of last year to $822.3 million as fund inflows were less in all asset classes, according to Colliers. Real estate consultant Colliers India data showed that institutional investments in real estate stood at $822.3 million during October-December 2023, as against $1,299.40 million in the year-ago period.

The inflow of funds declined 23 per cent in the office segment to $135.5 million during the fourth quarter of last calendar year, from $175.5 million in the corresponding period of the previous year. In housing, the investments plunged 79 per cent to $81 million in October-December 2023, from $379.1 million in the year-ago period.

Alternate assets saw a dip of 11 per cent to $418.7 million, from $467.9 million. Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing and schools among others.

Fund inflow in industrial and warehousing assets dipped 16 per cent to $187.1 million during October-December last year, from $222 million in the corresponding period of the previous year. Mixed use projects did not attract any investments in the fourth quarter of 2023, as against $54.9 million in the year-ago period.

The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. During the entire 2023 calendar year, institutional investments in real estate grew 10 per cent to $5,380.40 million, from $4,877.90 million in the previous year.

The office segment dominated in fund inflow with a 53 per cent rise in investment to $3,022.50 million during last year, from $1,978.30 million in the 2022 calendar year. In housing, the investments rose 20 per cent to $788.9 million in 2023, from $655.6 million in the previous year.

Fund inflow in industrial and warehousing projects more than doubled to $877.6 million last year, from $421.8 million in 2022. Alternate assets saw a 25 per cent decline in investments to $649.1 million, from $866.7 million.

Inflow of funds in mixed-use projects fell sharply by 91 per cent to $42.3 million in 2023, from $463.7 million in 2022. Retail assets did not receive any institutional investments last year as against $491.8 million in the 2022 calendar year, the Colliers data showed.