Institutional investments in real estate down 17% in 2021 at $ 4-bn: Report

Institutional investment in real estate fell 17 per cent year-on-year in 2021 to USD 4 billion because of lower inflows in office segment, according to property consultant Colliers India.

Institutional investments declined to USD 4,033 million in 2021 from USD 4,833 million in the previous year.

Colliers India attributed the fall in investments to conclusion of some large transactions in 2020.

As per the data, the institutional investments in office assets fell to USD 1,248 million last year from USD 2,199 million in 2020 calendar year. Similarly, the inflows in mixed-use development projects dipped to USD 182 million from USD 1,616 million.

Retail assets also saw a marginal fall in investments to USD 77 million from USD 79 million.

In contrast, industrial and logistics segment received USD 1,130 million institutional investments in 2021, a sharp jump from USD 195 million in the previous year. The industrial and logistics investments has been highest in 5 years.

Institutional investments in housing sector rose to USD 919 million from USD 386 million, while inflows in alternative assets (student housing, co-living, life sciences, data centers) grew to USD 453 million from USD 359 million.

Colliers highlighted that the industrial and logistics segment has been drawing strong operator and investor interest due to increased demand from e-commerce and 3PL (Third Party Logistics) players post pandemic.

In the housing segment, the consultant said that private equity funds are looking at providing capital for fresh investments and also for refinancing/ restructuring existing loans of banks and NBFCs.

The luxury housing segment accounted for about 35 per cent of the total investments, with the rest in mid-income and affordable category projects.