· Foreign investments saw a 47% YoY rise, while domestic investments surged 70% YoY
· Office sector continued to dominate at 63% share in total inflows
· Industrial & warehousing and residential sector witnessed a 3.5X and 2.6X YoY rise, respectively
Institutional investments in Indian real estate touched USD4.6 bn during January-September 2023, a 27% YoY increase, highlighting the resilience and attractiveness of the market despite prevailing global challenges. It is worth noting that institutional investment inflows for 2023 have already reached 93% of the total inflows recorded in 2022, despite a clouded global economic environment. While foreign investments continued to lead with 77% share in total investments, domestic investments remained strong and witnessed a two-fold rise YoY at USD1.1Bn. Interestingly, domestic investments led investment activity in Q3 2023, forming 63% of the total investments, abutting the overall investment volume at USD0.8Bn for the quarter. While office assets saw moderation in inflows during the quarter, residential and industrial & warehousing segments witnessed a rebound accounting for about 78% of the total investment volume. India’s sturdy economic growth, and a continued strong positive play of high-performance economic & market indicators are keeping the long-term confidence high amongst global & domestic investors.
Top 5 PE investment deals in YTD 2023 –
| Quarter | Year | Investor | Investee | Deal Value (USD Million) | City | Asset Class |
| Q2 | 2023 | Brookfield India Real Estate Investments Trust and GIC | 1400.0 | Others/ Multi City | Office | |
| Q2 | 2023 | CPPIB | RMZ Corp | 324.2 | Mumbai | office |
| Q1 | 2023 | Singapore-based fund | Pragati Group | 200.0 | Delhi NCR | Industrial & Logistics |
| Q3 | 2023 | HDFC Capital Advisors | The house of Abhinandan Lodha | 182.0 | Others/ Multi City | Residential |
| Q1 | 2023 | PAG Credit & Markets | M3M | 180.9 | Delhi NCR | Residential |
Source: Colliers
Top 3 PE investment deals in Q3 2023
| Quarter | Year | Investor | Investee | Deal Value (USD Million) | City | Asset Class |
| Q3 | 2023 | HDFC Capital Advisors | The house of Abhinandan Lodha | 182.0 | Others/ Multi City | Residential |
| Q3 | 2023 | Qatar Investment Authority (QIA) UK-based property major Grosvenor’s Diversified Property Investments business | Indospace | 150.0 | Others/ Multi City | Industrial & Logistics |
| Q3 | 2023 | Kotak Alternate Asset Managers (Kotakalt) | Sify Technologies | 72.2 | Others/ Multi City | Alternatives |
Source: Colliers
Office sector continues to lead; Residential and Industrial and warehousing see traction
Investment inflows in the office sector rose 1.6X YoY during Jan-September 2023, at USD2.9 billion, led by select large deals in the sector. This robust performance underscores the sustained confidence of investors in the sector’s growth potential and returns. There is an increased investor interest towards completed and/or preleased income yielding office assets, reflecting a conscious & cautious shift in investor strategies. Investors are actively forming large Joint Venture (JV) platforms to capitalize on emerging opportunities and participate in existing as well as upcoming office projects. While investors remain commited to office asset class during 2023, industrial & warehousing and residential sectors also saw a significant rebound.
“At a time when major global economies are weighed down by inflation woes, rising cost of capital and growth uncertainty, India’s real estate market stands strong, by navigating through difficult market conditions. The resilience of the market can be gauged in terms of heightened deal activity and amount of capital allocated across diverse asset classes. During the first nine months ended September 2023, overall institutional investments stood strong at USD4.6Bn, a 27% YoY rise, steered by long-term confidence in the region and avenues for diversification. While some volatility and uncertainty will remain in the short-term, the industry is well positioned for a robust 2023 and beyond,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.
Investments inflows (USD mn) –
| Asset Class | Q3 2022 | Q3 2023 | Q3 2023 vs Q3 2022 (% Change) | YTD 2022 | YTD 2023 | YTD 2023 vs YTD 2022 (% Change) |
| Office | 694.3 | 79.1 | -89% | 1,802.8 | 2,886.9 | 60% |
| Residential | 187.0 | 274.6 | 47% | 276.5 | 707.9 | 156% |
| Alternate assets* | – | 72.2 | – | 398.8 | 230.4 | -42% |
| Industrial & Warehousing | 20.0 | 340.3 | 1602% | 199.8 | 690.6 | 246% |
| Mixed-use | 100.8 | 27.2 | -73% | 408.8 | 42.3 | -90% |
| Retail | – | – | – | 491.8 | – | -100% |
| Total | 1,002.1 | 793.4 | -21% | 3,578.5 | 4,558.1 | 27% |
*Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing etc
YTD refers to the Jan-Sep period of the year
Source: Colliers
City-wise investment inflows in Indian real estate (USD million)
| City | YTD 2022 | YTD 2023 | YoY for YTD 2023 | Investment Share % YTD 2023 |
| Bengaluru | 374.3 | 241.8 | -35% | 5% |
| Chennai | 344.5 | 132.3 | -62% | 3% |
| Delhi NCR | 754.2 | 492.0 | -35% | 11% |
| Hyderabad | – | 127.3 | – | 3% |
| Kolkata | – | – | – | 0% |
| Mumbai | 477.3 | 585.8 | 23% | 13% |
| Pune | 9.4 | – | -100% | 0% |
| Others/ Multi-City | 1,618.8 | 2,978.9 | 84% | 65% |
| Total | 3,578.5 | 4,558.1 | 27% | 100% |
Source: Colliers
Domestic investors gain further ground with 1.7X rise in inflows during Jan-September 2023
Domestic investors have become more active in the market, contributing 23% of the total investments during this period, compared to an 18% share in the same period in 2022, infusing majority of the funds into residential sector. Nonetheless, foreign investments maintained their lead during Jan-Sep 2023, accounting for a 77% share of total investments with USD3.5 billion inflows. This was a 47% YoY surge compared to same period last year.
“The Indian real estate sector continues to demonstrate its allure as a resilient and promising investment destination, with both domestic and international investors showing relentless commitment to participate in its high growth phase. Investment inflows by domestic investors are specifically on the rise and have seen about 70% YoY rise during Jan-Sep 2023. About half of the total investments by domestic investors was directed towards residential assets during the period. This renewed interest in residential assets backed by stable interest rates is expected to drive heightened activity during the upcoming festive season; resonating upbeat confidence amongst investors, developers & homebuyers alike.” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
Investments in industrial & warehousing sector witnessed 3.5X rise YoY
Investment inflows into industrial assets have surged by a stirring 3.5 times, at USD690.6 million during Jan-September 2023. This remarkable growth can be attributed to the sustained expansion of the industrial sector, which has thrived on the surging consumption levels. India’s bolstering manufacturing sector has been a prominent driver of this growth, advancing at an impressive pace owing to robust demand and increased industrial output. Key indicators such as Index of Industrial production (IIP) in India increased 5.7% year-on year in July 2023 while India’s Manufacturing Purchasing Managers’ Index (PMI) rose 4% YoY at 57.5 in September 2023, signalling strong demand conditions and enhanced business sentiments within the manufacturing sector. Upturn in domestic consumption trends, rising demand from 3PL players indicate an attractive investment scenario in the foreseeable future.
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