Institutional investments in real estate down 37% in Oct-Dec to $822 mn: Colliers

Institutional investments in real estate fell 37% 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% 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% to $81 million in October-December 2023، from $379.1 million in the year-ago period.

Alternate assets

Alternate assets saw a dip of 11% 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% 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% to $5،380.40 million، from $4،877.90 million in the previous year.

The office segment dominated in fund inflow with a 53% 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% to $788.9 million in 2023، from $655.6 million in the previous year.

Industrial projects

Fund inflow in industrial & Warehousing projects more than doubled to $877.6 million last year، from $421.8 million in 2022. Alternate assets saw a 25% decline in investments to $649.1 million، from $866.7 million.

Inflow of funds in mixed use projects fell sharply by 91% 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.