Office Sector Investment Inflows Increased By $2.7 Billion In The First Half Of 2023: Report
July 14, 2023: According to a research by renowned real estate brokerage firm Colliers India, institutional investments into the office sector increased 2.5X year over year during the first half of 2023 (H1 2023) to $2.7 billion, showing ongoing investor confidence in the sector’s development and return prospects. Office sector continued to account for the largest portion of overall inflows during H12023, with a share of 74%, and residential sector, with a share of 12%. The office sector drove a 43% YoY growth to $3.7 billion in institutional investment inflows into Indian real estate in the first half of 2023.
Are you searching for new projects in kandivali?
Despite a sluggish global economy, institutional investment inflows are already roughly 75% of the total inflows in 2022. The fundamentals of real estate asset classes, including office and residential, among others, depend on the strong domestic economic outlook and continue to be solid. On the strength of expanded opportunities, steady demand, and strong growth prospects over the following two to three years, institutional investors have placed their bets in the office sector.
Robust and increased demand for Grade-Over the past five years, foreign investments in the office sector have increased thanks to factors like access to offices, a strong supply pipeline, improved transparency, and the availability of exit strategies like REITs. 71% of all investments in the industry totaled $1.9 billion in foreign purchases of office properties during the first half of 2023.
About Office sector investment inflows
The Indian office market is still viewed favourably by international investors, who have showed growing interest in high-quality, income-producing Grade-A office properties. A solid supply pipeline of more than 150 million square feet (in various stages of development) across the top six cities offers newer investment prospects in the next three years, even if leading institutional investors already support the majority of the current prominent office developments. Large Joint Venture (JV) platforms are being created by investors across the spectrum to help them allocate capital to future office projects and the rising possibility.
” Investment decisions are taking longer as a result of the worldwide recalibration of the office business. Additionally, as investors revalue the global macro risks, interest rates & inflationary pressures are also temporarily keeping investors in a wait-and-watch mindset. In addition to owning generating assets, there is a resurgent interest in residential real estate, according to Piyush Gupta, managing director, capital markets & investment services at Colliers India. “More money is anxious to enter the Indian market, indicating that the investment willingness is still strong.
Inflows of investments in dollars
| Asset Class | Q2 2022 | Q2 2023 | Q2 2023 vs Q2 2022 (% Change) | H1 2022 | H1 2023 | H1 2023 vs H1 2022 (% Change) |
| Residential | 72.9 | 72.3 | -1% | 89.4 | 433.4 | 385% |
| Office | 464.9 | 1,811.6 | 290% | 1,108.5 | 2,719.2 | 145% |
| Mixed use | 230.7 | – | -100% | 308.0 | 15.1 | -95% |
| Alternate assets* | 359.0 | – | -100% | 398.8 | 158.2 | -60% |
| Retail | 234.8 | – | -100% | 491.8 | 0.0 | -100% |
| Industrial & Warehousing | – | 133.9 | – | 179.8 | 350.2 | 95% |
| Total | 1,362.3 | 2,017.8 | 48% | 2,576.3 | 3,676.1 | 43% |
Reits are making more progress
The Indian office market has been corporatized by real estate investment trusts (Reits), and positive regulatory reforms have increased investment in the industry. While just 11% of Grade-A office space in the top 6 cities is currently listed as Reits, there is still an extra 57% of untapped potential.
“During Q2 2023, investment inflows into the office sector reached $1.8 billion, the highest level in the previous 10 quarters. Growing investments in the industry are a result of investors’ persistent confidence amid strong demand, a good supply pipeline, and the presence of three profitable reits in the office market. In the upcoming years, it is anticipated that both domestic and international investors would increase their investments in the industry, along with the stock of REITable offices. Along with the office sector, residential investments increased during H1 2023, showing a 5X increase YoY. Due to their promising development prospects, potential for reliable returns, and advantages of diversification, investors are anticipated to increase their exposure to residential & alternative assets in the future.
Residential asset investments have increased by 5X
At $433.4 million in H1 2023, the residential sector had a stunning five-fold growth in investment inflows, mostly from domestic investors. Improvements in home demand, stable interest rates, and strong affordability levels have all contributed to a recovery in residential asset investments.
A roughly two-fold rise in investment inflows into industrial assets was also observed, driven by the sector’s continued expansion in the face of increased consumption. India’s manufacturing industry is still expanding quickly because to robust demand and high industrial production. In June 2023, India’s manufacturing PMI reached a 31-month high due to strong demand and improving business optimism. A rise in domestic consumption and rising demand from the manufacturing and 3PL sectors will stimulate investment inflows into the industry.
You’re looking for Projects in Bandra we have the Best Properties In Mumbai Like Ready to Move:https://navimumbaihouses.com/properties/search/bandra/
If you want daily property update details please follow us on Facebook Page / YouTube Channel / Twitter
