USD 1.6 Bn Flow In Q2
India’s real estate sector has a huge upside potential, says Shrinivas Rao, CEO at Vestian
NEW DELHI, Aug 2 (The CONNECT) – Institutional investments in Indian realty sector have reached USD 1.6 Bn during Q2 2023, marking a substantial 33.3% increase from the previous quarter, said Vestian, a commercial real estate consultant.
The investments, however, witnessed a dip of 40.7% Y-o-Y, depicting a certain level of volatility in the market.
Bengaluru-based Vestian said in its investment report “Institutional Investment in Indian Real Estate Q2 2023” that the Indian real estate sector has demonstrated remarkable resilience in the face of market uncertainty.
Here is a look at the recent investments:
| Quarters | Institutional Investments (USD Bn) | Q-o-Q Change (%) | Y-o-Y Change (%) |
| Q2 2022 | 2.7 | 98% | 81% |
| Q3 2022 | 0.4 | -86% | -53% |
| Q4 2022 | 1.5 | 316% | 103% |
| Q1 2023 | 1.2 | -19% | -9% |
| Q2 2023 | 1.6 | 29% | -41% |
| Source: Vestian Research | |||
| The report noted that commercial assets (office space, co-working, retail, and hotels) accounted for 88% of total investments during Q2 2023, while | |||
| around 92% of total investments during Q2 2023 were from foreign investors. | |||
Shrinivas Rao, CEO at Vestian said, the real estate sector is likely to garner increased traction in the upcoming quarters on the back of robust GDP growth and a strong pipeline of upcoming infrastructure developments.
Investments in commercial assets (office, retail, co-working, and hospitality projects) surged to 88% in Q2 2023 from 39% in Q1 2023, indicating a renewed demand for office spaces. In contrast, the share of residential sector declined from 27% in Q1 2023 to a mere 4% in Q2 2023, as lower-yielding investments found less appeal with institutional investors.
| Asset-wise Institutional Investments (USD Mn) | |||||
| Asset Class | Q2 2022 | Q1 2023 | Q2 2023 | Q-o-Q Change (%) | Y-o-Y Change (%) |
| Commercial | 697 | 485 | 1,400 | 189% | 101% |
| Residential | 738 | 338 | 58 | -83% | -92% |
| Industrial & Warehousing | 1,000 | 216 | 134 | -38% | -87% |
| Diversified | 57 | 200 | – | NA | NA |
| Alternative | 200 | – | – | NA | NA |
| Total | 2,693 | 1,238 | 1,592 | 29% | -41% |
Foreign investors dominated the total institutional investments received during Q2 2023, with 92% share as investors are bullish about India’s growth story. Additionally, majority of the investment deals were multi-city deals, accounting for around 94%.
“In the midst of global challenges, a surge in foreign institutional investments suggests that India’s real estate sector has a huge upside potential,” Shrini added.
