Institutional funds in residential realty up 71%
Overall, the Indian real estate sector received institutional investments worth $679.9 million during July-September quarter
Share of commercial assets (office space, co-working, retail, and hotels) declined to 24% in Q2 FY24 from 40% in same quarter last year. Office assets attracted $164.1 million worth of institutional investments during Q2 FY24 as against $150 million in the year-ago period
Mumbai: Residential assets attracted $298.3 million of institutional investments during July-September quarter (Q2) of financial year 2023-24, up 71 per cent from the year-ago period, according to real estate consultant Vestian. Institutional investments in residential assets stood at $174.3 million in the year-ago period.
Overall, the Indian real estate sector received institutional investments worth $679.9 million during the Q2 FY24, up 82 per cent from the same period last year when inflow was $374.3 million.
Talking to Bizz Buzz, Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd says, “There has been a notable surge in investor confidence in real estate investments over the last few years. This trend is evident among both domestic and foreign institutional investors, who are diversifying their portfolios across various segments including residential, commercial, and others. We anticipate this momentum to persist, given India's robust economic performance and promising outlook.”
The share of domestic investors accounted for 71 per cent of total institutional investments received in Q2 FY24. On the other hand, the share of foreign investors reduced to 27 per cent in Q2 FY24 from 55 per cent in same quarter a year ago. However, the total institutional inflow in the Q2 FY24 period fell 57 per cent when compared to the previous quarter due to a significant decline in foreign fund inflow.
Commenting on the report, Vestian CEO Shrinivas Rao said, “Institutional investments have slowed down during the September quarter due to limited interest from foreign investors amid a challenging global macroeconomic landscape." However, Rao noted that large conglomerates are calling their “
“As a result, upcoming quarters may witness increased investments on the back of this renewed demand from the office sector,” he observed. Across various asset class, residential sector attracted the highest institutional investments during the third quarter of this calendar year, although the share has reduced to 44 per cent in Q2 FY24 from 47 per cent a year earlier.
Share of commercial assets (office space, co-working, retail, and hotels) declined to 24 per cent in Q2 FY24 from 40 per cent in same quarter last year. Office assets attracted $164.1 million worth of institutional investments during Q2 FY24 as against $150 million in the year-ago period. On the other hand, share for the industrial and warehousing sector increased significantly to 28 per cent in Q2 FY24 from a negligible share in corresponding quarter previous year.
The government’s push for the ‘Make in India’ campaign and growing popularity of e-commerce resulted in increased demand for industrial spaces and warehouses across the country, Vestian said. "This led to significant interest from large investors."
