During the last quarter of 2023, institutional investments in the real estate sector saw a substantial decline of 37 per cent, totaling USD 822.3 million, based on Colliers India’s data.
Specifically, the office segment experienced a 23 percent reduction in funds, with inflows dropping to USD 135.5 million from the USD 175.5 million noted in the same period of 2022. Residential property investments also plummeted by 79 per cent to USD 81 million, a significant contraction from the USD 379.1 million recorded a year prior.
In alternative asset sectors like data centers, life sciences, and senior housing, there was a modest 11 per cent decline, with total investments amounting to USD 418.7 million. Industrial and warehousing segments observed a 16 per cent downturn, with investments reaching USD 187.1 million in the final quarter of 2023, down from USD 222 million in 2022.
Interestingly, mixed-use projects didn’t attract any institutional investments in the fourth quarter of 2023, contrasting sharply with the USD 54.9 million received in the same period the previous year.
For the entire calendar year of 2023, despite the quarterly drop, institutional investments in real estate grew by 10 per cent, reaching USD 5,380.4 million compared to USD 4,877.9 million in 2022. Office spaces remained a major contributor, witnessing a 53 per cent surge to USD 3,022.5 million. Residential property investments also rose by 20 per cent, reaching USD 788.9 million in 2023.
However, alternate assets experienced a 25 per cent decline, garnering USD 649.1 million compared to USD 866.7 million in the prior year. Mixed-use projects faced a significant 91 per cent drop, securing only USD 42.3 million in 2023 compared to USD 463.7 million in 2022. Retail assets also saw no institutional investments throughout 2023, unlike the USD 491.8 million recorded in 2022, according to Colliers’ data.
