Institutional investment in housing jumps 5-fold to USD 433 mn in Jan-Jun: Report

Institutional investments in housing segment jumped nearly five times to USD 433.4 million during January-June this year, while inflow in industrial & warehousing assets increased 95 per cent to USD 350.2 million, according to Colliers India.

Inflow in housing segment and industrial & warehousing stood at USD 89.4 million and USD 179.8 million, respectively, in the year-ago period.

The institutional investment 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.

The residential sector experienced a remarkable five-fold increase in investment inflows during first half of 2023, primarily driven by domestic investments.

Investments in residential assets have seen a rebound led by improved housing demand amidst stable interest rates and healthy affordability levels, the consultant said.

"Industrial assets saw about a two-fold increase in investment inflows led by sustained growth of the sector amidst rising consumption. India's manufacturing sector continues to grow at rapid pace, owing to strong demand and industrial output," Colliers said.

The sector would continue to receive investment inflows, driven by an upturn in domestic consumption, and growing demand from 3PL (third-party logistics players) and manufacturing sector, the consultant added.

Investment in alternate assets like data centres, life sciences, senior housing, holiday homes, and student housing, among others, fell 60 per cent to USD 158.2 million in January-June from USD 398.8 million in the year-ago period.

Overall across all asset-class, the institutional investments into Indian real estate rose 43 per cent to USD 3.7 billion in the first half of the 2023 calendar year from USD 2.57 billion in the corresponding period of the previous year.

Out of the total inflow of USD 3.7 billion in January-June, office assets attracted USD 2,719.2 million (USD 2.7 billion) during the period from USD 1,108.5 million in the year-ago period. Institutional investment in mixed-use project declined 95 per cent to USD 15.1 million in the first half of this fiscal from USD 308 million in the corresponding period of the previous year.

Retail real estate assets did not attract any investments in the first half of this year from USD 491.8 million a year ago. The total institutional investment in real estate stood at USD 5.7 billion in the 2018 calendar year, USD 6.3 billion in 2019, USD 4.8 billion in 2020, USD 4 billion in 2021 and USD 4.9 billion in 2022.

"Institutional investment inflows are already about 75 per cent of the total inflows in 2022 despite a weak global economic environment," it added.