Institutional investments in real estate dip 37% in Oct-Dec: Colliers

Institutional investments within the real estate sector experienced a significant contraction, declining by 37 per cent year-on-year to $822.3 million during the October-December quarter of 2023, according to data from real estate consultancy firm Colliers India.

Breaking down the figures, the office segment witnessed a 23 per cent reduction in fund inflows, amounting to $135.5 million during the fourth quarter of 2023, down from $175.5 million in the corresponding period of 2022. Concurrently, investments in residential properties plummeted by 79 per cent, contracting to $81 million compared to $379.1 million a year earlier.

Within the alternate asset categories, which encompass sectors such as data centres, life sciences, and senior housing, among others, there was a modest decline of 11 per cent, with investments totalling $418.7 million. Meanwhile, the industrial and warehousing segment experienced a 16 per cent downturn, registering $187.1 million in the last quarter of 2023, a decrease from $222 million in 2022.

Interestingly, mixed-use projects failed to attract any institutional investments during the final quarter of 2023, in stark contrast to the $54.9 million garnered during the same period in the previous year.

For the entire calendar year of 2023, despite the quarterly decline, institutional investments in real estate expanded by 10 per cent to $5,380.4 million, compared to $4,877.9 million in 2022. The office segment remained a significant contributor, witnessing a 53 per cent surge in investments to $3,022.5 million. Concurrently, residential property investments grew by 20 per cent, reaching $788.9 million in 2023.

In contrast, alternate assets experienced a 25 per cent contraction, attracting $649.1 million, down from $866.7 million the previous year. Furthermore, mixed-use projects saw a drastic 91 per cent decline, securing a mere $42.3 million in 2023 compared to $463.7 million in 2022. Retail assets also remained devoid of institutional investments throughout 2023, a stark contrast to the $491.8 million recorded in 2022, as per Colliers' data.

(With PTI inputs)