Institutional investments in real estate grow 11% in Jul-Sep: Colliers

Institutional investments in Indian real estate rose 11 per cent to $1.27 billion in July-September on better fund inflows into office assets, according to Colliers.

Real estate consultant Colliers India data showed that the institutional investments in real estate increased to 1,269.5 million during July-September, up from $1,148.7 million in the year-ago period.

"This reflects continued investor confidence in India's economic fundamentals and resilience of the real estate sector," Colliers India CEO Badal Yagnik said.

Out of the nearly $1.27 billion inflow, the domestic investors pumped in $762.4 million (60 per cent share) while the foreign investors contributed $ 507.1 million.

Interestingly, the investments from domestic sources rose 51 per cent annually in July-September, and inflows from foreign investors fell 21 per cent.

"Domestic capital contributed 60 per cent of the quarterly inflows, with strong interest in office and residential segments. Notably, office assets accounted for over three-fourths of the domestic investments during the quarter, indicating a continued appetite for both ready and developmental commercial properties," Yagnik said.

He projected the investment's momentum to hold steady going forward, despite foreign investors being cautious amid global uncertainties.

As per the data, Institutional investment in office assets rose 27 per cent to $ 779.9 million during July-September, from $ 616.3 million in the year-ago period.

However, the inflow in the residential segment dipped 17 per cent to $ 319.7 million in the third quarter of this calendar year, from $ 384.8 million in the corresponding period of the preceding year.

Institutional flow of funds includes investments from family offices, foreign corporate groups, foreign banks, proprietary trading books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs, and sovereign wealth funds.

Commenting on the investment scenario, Ankur Jalan, CEO of Golden Growth Fund, a real estate-focused Alternative Investment Fund, said, "The growth in institutional investment is reflective of the investor confidence on the back of strong demand exhibited across all real estate asset classes."  "With rationalisation of income tax and GST, and declining interest rate, all of which are expected to enhance consumption and hence India's GDP, investor sentiments and confidence in the real estate sector will remain strong," he added.