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17 August, 2023
Institutional investment worth $1.6 billion has poured into the Indian real estate sector between April and June 2023. Compared to the same period in 2022, this marks a 41% drop. During this period last year, the sector reported investments worth $2.7 billion. However, this is 29% higher than the figures in the last quarter, where investments of $1.2 billion were made.
In the second quarter of 2022, the sector reported an 81% YoY increment in institutional investments, at $2.7 billion. The quarter-on-quarter (QoQ) increment, on the other hand, was 98%. In the next quarter, the market took a blow when institutional investments dropped by 86% QoQ.
The last quarter of 2022 witnessed a surge in investments, where the QoQ increment was 316%. the YoY increment was $1.5 billion. Again, this was 19% lower in the first quarter of 2023, around $1.2 billion. This trend reveals that the real estate sector in India is quite volatile in terms of institutional investments.
Experts reveal that the upward investment trajectory shows that institutional investors have revived their interest in real estate, as the macroeconomic landscape looks challenging. The real estate sector is likely to receive more traction in the coming quarters with a strong infrastructure pipeline and GDP growth backing them.
The real estate industry in India is being streamlined by commercial assets. The demand for co-working, hospitality, retail, and office projects is on the rise.
One of the striking trends of investment shows that foreign investors are dominating institutional real estate investments. In the second quarter of 2023, foreign investors contributed 92% of all the investments in this sector. They are bullish about the growth of the sector, and most of them are settling for multi-city deals. Experts observe that an increment in foreign institutional investments amidst global challenges shows the huge upside potential of the Indian real estate sector. This explains why an increasing number of investors are channelling their funds into this industry.