Institutional investments in real estate sector dips 40.7% Y-o-Y during Q2 2023

Institutional investments in Indian real estate sector witnessed a dip of 40.7% Y-o-Y during Q2 2023, according to Vestian, a commercial real estate consultant.

The report states that the Indian real estate sector has demonstrated remarkable resilience in the face of market uncertainty, witnessing a surge in institutional investments during the second quarter of 2023.

As per Vestian Research, institutional investments reached USD 1.6 Bn during Q2 2023, marking a substantial 33.3% increase from the previous quarter.

“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,” said Shrinivas Rao, FRICS, CEO, Vestian.

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.

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%.