Construction Industry News
Institutional investments in the Indian real estate sector remained stable at $5.4 billion and increased 10% year-on-year in 2023. The year recorded the highest levels of investment inflows since 2020, demonstrating India's resilience despite the uncertainties that persist in global markets. While foreign investment maintained its dominance, accounting for 67% of total inflows for the year, domestic investment also recorded an impressive annual increase of 66% to $1.7 billion. The office sector remained the largest contributor to real estate investment in 2023, with a 56% share of total inflows, attracting both global and domestic capital. While overall investment inflows remained strong throughout the year, there was a moderation in the final quarter of the year. At $800 million, the fourth quarter saw a 37% year-over-year decline in investments. Meanwhile, alternatives held a 51% share of total entries in Q4 2023, indicating strong demand in segments such as data centers, student housing, life sciences, schools, etc.
hile major global investment markets faced downside risks, India maintained its status as one of the fastest growing economies, keeping investor confidence intact. While US inflows in 2023 have shown a decline from 2020 levels, Canada and Singapore are increasingly establishing themselves as the main source of foreign capital in the Indian real estate sector. These two countries accounted for 78% of global real estate inflows to India in 2023. Notably, investment inflows from APAC countries have increased year on year, up to 3.6 times in 2023 compared to 2020. Investors continue to view India positively. , thanks to strong economic performance, an improved regulatory environment and sustained demand in various real estate segments.
“As the Indian real estate sector concludes another promising year, institutional investment saw a 10% increase to reach $5.4 billion, the highest level since 2020. Investment in Indian real estate has been more broad-based, with significant investments in education, shared spaces and data centers, contributing to a strong internal rebound in office, residential and industrial areas. APAC investors have shown increasing interest in the Indian real estate sector, contributing to around half of the total foreign inflows in 2023. Looking ahead to 2024, investment activity is likely to continue unabated, supported by “strong internal economic fundamentals, while a strategic integration of technology and ESG criteria will play a role in investment decisions.” says Piyush Gupta, MD, Capital Markets and Investment Services at Colliers India.
National capital inflows increased by 66% year-on-year in 2023 Domestic investors have become active contributors, contributing 32% of total real estate investments in 2023, up from 22% of their share in 2022. While the office market remains the leader, supported by investments from players Globally, domestic investors are focusing more on alternative investments. and residential assets.The office sector continues to be a leader; Investments in alternatives are recovering significantly.
Investment inflows into the office sector increased 53% year-on-year to $3 billion in 2023, driven by select major deals. The recovery reflects growing interest in income-generating completed and pre-leased office buildings, demonstrating continued investor confidence in the sector's long-term potential. In particular, investors are actively creating joint venture (JV) platforms to take advantage of emerging opportunities and participate in both existing and future office projects. In 2023, a number of important platforms for the development of both offices and housing will be established.
“In the ever-evolving Indian real estate landscape, the office sector continues to enjoy significant affinity as investors continue to diversify their portfolios. Driven by strong demand for high-quality commercial developments, investments in the office sector continue to grow. As 2023 saw record office leasing activity, global institutional investors remained committed to building office portfolios in India.
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