Institutional investments in housing segment rises 71% in July-September: Vestian

Institutional investments in residential assets rose 71 per cent to USD 298.3 million during the July-September period, according to real estate consultant Vestian. The housing segment had attracted an institutional investment of USD 174.3 million in the year-ago period. Vestian on Thursday released its report stating that the Indian real estate sector received institutional investments worth USD 679.9 million during the third quarter of 2023 calendar year, up 82 per cent from the same period last year when inflow was USD 374.3 million. However, the total institutional inflow in the July-September period fell 57 per cent 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 employees back to the office, which may inflate demand for office spaces across the country. "As a result, upcoming quarters may witness increased investments on the back of this renewed demand from the office sector," he observed.

The share of domestic investors accounted for 71 per cent of total institutional investments received in the third quarter of 2023. On the other hand, the share of foreign investors reduced to 27 per cent during the period from 55 per cent in Q3 2022. Across various asset classes, Vestian said that the residential sector attracted the highest institutional investments during the third quarter of this calendar year, although its share has reduced to 44 per cent in Q3 2023 from 47 per cent a year earlier.

Share of commercial assets (office space, co-working, retail, and hotels) declined to 24 per cent in Q3 2023 from 40 per cent in Q3 2022. Office assets attracted USD 164.1 million worth of institutional investments during July-September as against USD 150 million in the year-ago period. Industrial and warehousing assets received USD 190.3 million during the July-September period, accounting for 28 per cent in the total inflow. In the year-ago period, industrial and warehousing parks did not get any funds.