Indian Real Estate Sees $5.4 Billion Institutional Investments in 2023, Led by Foreign Inflows: Report

In 2023, the Indian real estate sector witnessed a surge in institutional investments, reaching $5.4 billion, marking a notable 10% year-on-year increase, as reported by Colliers India.

Foreign investments continued to play a significant role, comprising 67% of the total inflows, while domestic investments exhibited a robust 66% growth, totaling $1.7 billion.

The office sector emerged as a frontrunner, capturing a substantial 56% share in the total inflows, attracting both global and domestic capital.

Despite overall stability, the fourth quarter experienced a 37% year-on-year decrease in investments, amounting to $0.8 billion. Notably, alternatives claimed a 51% share in Q4 inflows, reflecting strong demand in segments such as data centres, student housing, life sciences, and schools.

India, maintaining its status as a fast-growing economy, sustained investor confidence amidst challenges faced by global investment markets. While inflows from the United States dipped from 2020 levels, Canada and Singapore emerged as leading sources of foreign capital, contributing to 78% of global real estate inflows into India in 2023.

A noteworthy trend was the threefold increase in investment inflows from APAC countries compared to 2020. Investors favored India due to its robust economic performance, improved regulatory framework, and sustained demand across various real estate segments.