
- August 9, 2023
- News
India’s Real Estate Market Attracted $1.6bn Investment In Apr-June : Report
India’s Real Estate Market : Foreign investors spearheaded the $1.6 billion institutional investment, which included commercial assets including hotels, offices, retail stores, etc.
According to a survey, a commercial real estate consultancy, institutional investment in the Indian real estate market totaled $1.6 billion. Institutional investment has decreased by 41% over the same time previous year, when the industry recorded $2.7 billion. However, this is a 29% increase from the previous quarter, which concluded in March 2023, when it was $1.2 billion.
The “Institutional Investment in Indian Real Estate Q2 2023” study by the Bengaluru-based consultancy firm described how the real estate market had gradually improved over the previous five quarters.
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Institutional investment in the real estate industry was $2.7 billion in the second quarter (Q2) of 2022, a rise of 81% year over year and 98% quarter over quarter. The market, however, suffered a huge setback the following quarter as institutional investments dropped by 86% QoQ to $0.4%.
Investments increased dramatically in the last quarter of 2022, by a stunning 316 percent QoQ and 103 percent YoY, to $1.5 billion. In the first quarter (Q1) of 2023, this decreased once further by 19% to $1.2 billion.
This information demonstrates the real estate industry’s volatility and rising tendency.
“This upward trajectory in investments demonstrates renewed interest from institutional investors amidst the challenging macroeconomic landscape,” On the strength of solid GDP growth and a healthy pipeline of planned infrastructure initiatives, the real estate industry is projected to gain further traction in the ensuing quarters.
India’s Real Estate Market : Commercial assets leading real estate growth
- Investments in commercial real estate (office, retail, co-working, and hotel developments) increased from 39% in Q1 2023 to 88% in Q2 2023, pointing to a resurgence in the demand for office space.
- In contrast, the residential sector’s share decreased from 27% in Q1 2023 to 4% in Q2 2023 as institutional investors became less interested in lower-yielding assets.
- Institutional investors put $1,400 million into commercial assets, a rise of 1% YoY from $697 million the year before and a rise of 189% from Q1 2023’s $485 million.
- The residential investment sector suffered the most, with a 92% YoY decline from $738 million to $58 million in Q2 2023.
- In the three months that ended on June 30, institutional investment in industrial and warehousing real estate decreased by 87% YoY, from $1,000 million to $134 million.
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Institutional investment is dominated by foreign investors.
A 92% share of the total institutional investments received during Q2 2023 came from foreign investors, who are optimistic about India’s economic prospects. Additionally, around 94 percent of the investment transactions included multiple cities.
A spike in foreign institutional investments indicates that India’s real estate market has significant upside potential despite the current global concerns.
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