Looking ahead, Blox is set to grow its GTV fivefold to $10 billion over the next 3-5 years, aligning with the rapid expansion of India’s real estate market, which is projected to exceed $1 trillion by 2030. As India’s first platform to combine Direct-to-Consumer (D2C) and Business-to-Business-to-Consumer (B2B2C) models, Blox is positioned to transform the way developers, brokers, and buyers interact in the real estate space.

A New Standard: India’s First Fully Integrated D2C and Broker-Led B2B2C Ecosystem

Founded in 2020 by Aditya Jhaveri and Shivani Karia Jhaveri, Blox is India’s only platform that allows homebuyers to purchase properties entirely online. Supported by $35 million in funding from prominent investors like Kunal Shah (founder of CRED) and Justin Mateen (co-founder of Tinder), Blox combines advanced AI with a broker-led B2B2C approach to deliver a seamless real estate experience.

This hybrid model, unique to Blox, integrates brokers directly into the platform, while maintaining a smooth, D2C experience for buyers by listing and subsequently selling inventory directly from developer to the buyers. As India’s first platform to support both D2C and broker-led sales, Blox provides developers with a powerful dual-pathway distribution system that elevates market access and expands their reach to both individual buyers and large broker networks.

Guardians: A Market Leader in Mumbai’s Real Estate

Founded in 2016, Guardians has transformed Mumbai’s real estate landscape with 174 project launches, 23,000 units sold, and a total sales turnover of $5.54 billion. Guardians has developed strong relationships with 86 developers and a network of 18,168 channel partners, making it a dominant force in the market. By partnering with Guardians, Blox accelerates its ability to reshape the real estate transaction process and expand its distribution capabilities at scale.

AI-Driven Efficiency and Scale

Blox’s AI-powered platform enhances the buying journey with predictive analytics, dynamic pricing models, and tailored property recommendations. Integrating these features with Guardians’ vast broker network, Blox enables fast, efficient, and transparent transactions for developers, brokers, and buyers. This tech-driven approach uniquely equips Blox to handle both D2C and broker-driven B2B2C transactions, setting a new operational standard for India’s real estate sector.

Strategic Restructuring for Growth and IPO Potential

To enhance its focus on technology-driven growth, Blox is carving out its real estate development and management assets into a separate entity, streamlining operations to support sustained growth. With a projected EBITDA profitability of 20-30%, Blox is poised to capture significant investor interest, paving the way for a potential IPO as it leads India’s digital real estate transformation.

CEO’s Vision: Bridging Technology and Traditional Brokerage for Maximum Impact

“Our vision at Blox is to transform the Indian real estate market by creating a seamless, transparent experience that brings value to buyers, brokers, and developers alike,” said Aditya Jhaveri, Founder and CEO of Blox. “By integrating Guardians, we’re not only enhancing the homebuying process but also establishing India’s first platform capable of supporting both D2C and broker-led B2B2C sales. This dual-pathway model is a game-changer for India’s real estate sector, offering developers unprecedented reach and flexibility.”

Jayesh Rathod, Director of Guardians, added: “Our partnership with Blox is set to reshape the real estate market in India. By combining Guardians’ market expertise and with Blox’s technology, we’re setting a new benchmark for transparency, efficiency, and service.”

With an eye on scaling to $10 billion GTV over the next 3-5 years, Blox is strategically positioned to capture investor interest as it redefines India’s residential real estate market and approaches a public listing.

Also Read: Main Streets Lead Retail Leasing Growth in Q3 2024; Rentals Surge Amid Tightening Vacancies

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Mumbai 11 November 2024: With housing emerging as India’s most-preferred investment option, the time it takes for property seekers to convert to buyers is a critical metric to gauge overall demand. Latest ANAROCK data indicates that this conversion time (from first lead to actual booking) is reducing steadily and stands at about 26 days in H1 FY2025, against the highest peak of 33 days in FY 2021. 

The lead-to-conversion time was at its lowest at 25 days in FY 2019 and FY 2024. If we compare the current trends with those of a year ago, there is an increase of a day in H1 FY2025 – it was 25 days in FY 2024. 

Days to Booking a House: Yearly Trends

Source: ANAROCK Research

A deeper analysis of the budget category data shows that ultra-luxury homes (priced >INR 3 Cr) involve the lowest conversion time, clocking in at just 15 days in H1 FY 2025. Back in FY 2024, it was 22 days – thereby reducing by a whole week.

Anuj Puri, Chairman – ANAROCK Group, says, “Ultra-luxury homes buyers are financially equipped to make quicker decisions. Also, high-end homes are currently in greatest demand and desirable inventory tends to sell out fast, necessitating a need for speed.”  

Out of all budget categories, buyers of homes priced between INR 50 lakh to INR 1 Cr took the most time (about 30 days) to decide on buying a home from the day they first got a lead to paying the booking amount. 

“In contrast, in FY 2024, the conversion time for this category of homes was the lowest at just 20 days,” says Puri. “However, if we compare H1 FY2025 data with that of the previous fiscal (FY2024), we note a slight increase in the conversion time – from 25 days in FY 2024 to about 26 days in H1 FY2025. We can attribute this to escalating property prices across cities in the last one year, which are causing purchase decisions to take longer “.

The conversion for homes priced between INR 1 Cr to INR 3 Cr stood at 27 days in H1 FY 2025. In FY 2024, conversion time taken was highest for homes priced between INR 1 Cr to INR 2 Cr (32 days). Properties priced between INR 2 Cr to INR 3 Cr took 26 days to be booked.

Affordable homes saw a minor reduction in the conversion time – from 27 days in FY 2024 to 26 days in H1 FY 2025.

Essentially, buyers took a longer time to book homes in FY2021 than they are taking today, reflecting the currently strong demand momentum. Given that the last few years have seen a surge in new supply by branded developers, buyers feel empowered to make quicker decisions as confidence in these players is high.

“Even with these decreases in lead-to-buy periods, it is unlikely that we will see any marked incremental changes in this process overall,” adds Puri. “Indian home buyers do not make purchase decisions lightly, given the huge capital outlay often involving most or all of their savings. Obviously, luxury and ultra-luxury home buyers do not operate from a place of financial constraint; however, this segment constitutes just about 10-11% of the overall Indian residential market sales currently. Affordable, mid-range – and, of late, upper-mid-range buyers will continue to define the bulk of demand in the country.

Also Read: Convenience ranks as a top priority for homebuyers while buying a home

The post Lead-to-Buy Conversion Time for Indian Housing Drops to 26 Days in H1 FY25, Reflecting Strong Demand appeared first on Square Feat India.

In terms of cities, Delhi-NCR emerged as the top destination for private equity investments in Q2, attracting USD 532 million and capturing 19% of the total share of investments. This marks a significant 74% year-on-year increase. 

The city maintained its lead in H1 as well, securing ~USD 633 million of inflows, or 16% share of the record USD 3.9 billion investment in the sector. The surge in investments in Delhi has been primarily driven by the office segment, with major equity buyouts by prominent fund houses. Residential sector in the city has also seen continued interest specially in the high-end and luxury segment.

Delhi was followed by Bengaluru with 13% (USD 509 million) and Hyderabad with 8% (USD 320 million) in investment share for H1. Multi-city deals accounted for the remaining 48% (USD 1,862 million) of the investments, reflecting a diversified investment strategy across various regions.

In terms of sectors, the surge in investments this quarter was dominated by the Logistics & Industrial (L&I) sector, which captured 56% of the total investments (1,542 USD million) and maintained its leading position with 41% of the total H1 inflows. The office sector followed closely for both Q2 and H1 with USD 924 million investments in Q2 and USD 1,196 million in H1. Residential came third with USD 309 million investments in Q2 and USD 1,002 million in H1.

Foreign investors played a crucial role, contributing 76.3% of the total investment volume in Q2 2024, with a significant portion of these investments directed towards L&I sector. Deals involving a combination of equity and structured debt constituted 62% of the total inflows, while pure equity infusion deals made up 25%.

On the macro economic side, the manufacturing sector grew by 9.9% year-on-year, and the tertiary sector grew by 7.6% annually. GST collections for June 2024 rose by 8% year-on-year, indicating robust domestic transaction volumes.

Somy Thomas, Managing Director, Valuation & Advisory and Capital Markets, Cushman & Wakefield said, “USD 3.9 billion of private equity inflows during the first half of 2024, already surpassing 70% of last year’s total, highlights the remarkable growth and investor confidence in India’s real estate market. This surge is primarily driven by infrastructure-related sectors like logistics and industrial, fueled by significant public investments in multi-modal economic corridors. Additionally, strong demand for office and residential spaces further solidifies the market’s appeal. With continued positive momentum, we anticipate a buoyant year for private equity investments in the commercial real estate sector, potentially exceeding initial expectations.”

Also Read: New Frontier in Real Estate Investment: Unlocking the Potential through Fractional Ownership

The post Real Estate Investment Surge; Industrial sector shines appeared first on Square Feat India.

Source: Vestian Research

Foreign investors accounted for the highest share, 71%, of the total investments received during the second quarter of 2024 as they flocked to India to capitalize on its robust economic growth. On the other hand, domestic investors accounted for around 20% share of the total investments in Q2 2024, which has declined significantly from 98% a quarter earlier. However, investments in value terms have increased by 18% over the previous quarter.

Note: Co-investment refers to joint funding by foreign and domestic investors.

Source: Vestian Research

Shrinivas Rao, FRICS, CEO, Vestian said, “Indian real estate sector garnered significant investments in the second quarter of 2024, dominated by foreign investors as the looming uncertainty over the major economies of the world has faded away. Moreover, domestic investors have also actively participated to capitalize on the robust economic growth.”

Industrial & Warehousing sector reported a single large deal worth USD 1.5 Bn, accounting for 48% of the total investments received in Q2 2024. The deal concluded between Abu Dhabi Investment Authority (ADIA), KKR, and Reliance Retail Ventures Limited (RRVL). Residential and commercial (office, retail, co-working, and hospitality projects) assets followed with 24% and 20% share, respectively.

A yearly decline of 56% during Q2 2024 in commercial investments (in value terms) was due to the conclusion of a major deal between GIC and Brookfield during Q2 2023.

Note: Commercial assets include office, retail, co-working, and hospitality projects.

Source: Vestian Research

Multi-city deals accounted for 61% of the total investments reported in Q2 2024, followed by Mumbai and Hyderabad with 13% and 12% respectively. KKR, ADIA, GIC, Xander, Blackstone, Mitsui, Nisus Finance, SWAMIH Fund, and HDFC Capital were some of the more prominent investors during the current quarter. Rao further added, “Investments are anticipated to increase in the upcoming quarters on the back of robust economic growth and infrastructure development.”

Also Read: At USD 2.5 Billion, Q2 2024 institutional investment in Indian real estate touches a 3-year high

The post Q2 2024: Received the Highest Institutional Investments in a Quarter Post-Pandemic, Dominated by Foreign Investors appeared first on Square Feat India.

·       With 81% share, foreign investors drove & dominated Q2 2024 real estate investments

·       Domestic investors infused USD 0.5 Bn, 2.8X times compared to Q2 2023 inflows

·       Bengaluru and Delhi NCR cumulatively attracted about 23% of the inflows in Q2 2024

After a steady start in Q1 2024, Q2 2024 saw accelerated momentum, registering USD 2.5 billion of inflows—the highest in any quarter since 2021. The industrial & warehousing segment accounted for the highest share of 61% of total investments, at USD 1.5 billion, led by select large deals in the segment. The residential segment also witnessed significant rise in quarterly inflows, 7.5X times compared to Q2 2023, capturing a 21% share of total institutional inflows into Indian real estate. In contrast, with USD 0.3 billion of investments in office assets, the segment witnessed subdued activity in Q2 2024. Although the annual decline was significant at 83%, the QoQ drop was relatively modest at 41%. The surge in industrial & warehousing, and residential investments resulted in a healthy investment volume of USD 3.5 billion for H1 2024 at an overall level, making up for the slow start in first quarter. Foreign investments remained robust, accounting for 81% of the total inflows in Q2 2024, predominantly led by investors from the US and UAE.

“Private equity investments in the Indian real estate have shown remarkable resilience and strength in first half of the year at USD 3.5 billion, reflecting robust market confidence. With foreign investments leading the charge at a significant 73% share in H1 2024, the sustained momentum is expected to drive positive sentiment for the entire year. Sustained growth in FDI and Domestic Capital in India Real Estate reciprocates the attractiveness and the positive long-term outlook for infrastructure, construction, and real estate in India. The domestic institutional and retail investor activity in Indian real estate is also expected to remain strong in second half of the year, driven by healthy economic activity and consumer confidence,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.

Quarterly investments in Industrial & warehousing segment surged to 11X times

During Q2 2024, the institutional investments in industrial & warehousing segment rose manifold,  11X times compared to Q2 2023 led by select large deals in the segment. Amidst rising demand for superior quality Grade A supply and evolving supply-chain models, investor confidence in the segment has significantly improved. With healthy demand momentum, global as well domestic investors are going to play a prominent role in consolidation of industrial & warehousing assets in the country. Amidst signficant spurt in E-commerce and retail consumption in India, various asset-level investors are likely to enter the market, boosting the demand for AI enabled warehouses and micro-fulfilment centers in the upcoming quarters.

Investment inflows (USD million) Q2 2024–

*Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools etc

Source: Colliers

Investment inflows (USD million) H1 2024 –

*Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools etc

Source: Colliers

“Driven by foreign investments, the industrial & warehousing segment witnessed about half of the total inflows in the first half of 2024. Interestingly, institutional investments in the segment for H1 2024 is almost twice the inflows in the entirety of 2023. With India’s Manufacturing Purchasing Managers’ (PMI) Index staying close to 60.0 in the last few months, investor confidence in the industrial & warehousing segment is likely to remain strong in throughout 2024. Furthermore, strategic infrastructure projects such as Dedicated Freight Corridors (DFCs) & Bharatmala and robust government policies such as National Logistics Policy, underscore substantial long-term growth opportunities for the industrial & warehousing segment in India,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Bengaluru and Delhi NCR together drove about 23% of the quarterly inflows

While at 72% share, multi-city deals continued to drive majority of the investment inflows during Q2 2024, Bengaluru and Delhi NCR together corresponded to about 23% of the total inflows during the quarter driven by foreign investments. About 56% of the quarterly inflows in Bengaluru were directed towards residential assets, followed by the office segment. Investments in the office segment were particularly strong in Delhi-NCR. Led by inflows into the office segment, Delhi NCR witnessed about 86% YoY rise in investment inflows during Q2 2024.

City wise investment inflows in Q2 2024 –

Source: Colliers

Select PE deals in Q2 2024 –

Also Read: Mumbai, Delhi NCR, and Bengaluru: Prime cities for Small and Medium (SM) REIT investment prospects

The post At USD 2.5 Billion, Q2 2024 institutional investment in Indian real estate touches a 3-year high appeared first on Square Feat India.

The rental rates and capital value for office segment have remained steady inspite of healthy demand for CRE in the key markets of Bengaluru that was countered by supply keeping the cap rates range bound. Mumbai office market saw lower supply with better demand pushing vacancy down, but yields did not change significantly. The return expectation in this stable yield environment remained unchanged with cap rates being range bound.The industrial cap rates remained flat owing to stabilization of yields and asset values as sustained demand from the third party logistic (3PL) players, eCommerce, and fast-moving consumer goods (FMCG) sectors is countered by new supply in Mumbai.

“RBI has maintained an accommodative stand in the interest rates despite the inflation being at the higher end of the targeted tolerance band. Further, the GDP growth rates are revised to be higher for 2024, backed by the growth of private consumption, investment indexes, and trade merchandise, indicating a positive Marco-economic climate. This is indicative of the RBI to continue maintaining an accommodative stance in the short term which will continue to ensure ease of capital supply in the market, pushing up both consumer and institutional investments. It will provide an impetus to the real estate assets where cost of financing and mortgage rates are likely to remain stable, thereby supporting the demand in the market. Additionally, it will lend support to demand keeping capital value and NOIs growth trends constant in yield-based real assets due to both operational and financial costs being range bound, resulting in stabilised cap rates in most asset classes.”, says Ajay Sharma, Managing Director, Valuation Services, Colliers India.

“Given the yields of commercial, retail and industrial segments, the overall real estate sector will witness stable growth, and there will be increased interest in investments leading to significant capital flow to these assets.”, adds Sharma.

Also Read: MTHL to drive investments for resort homes in Alibaug

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·       Domestic investments rose 66% YoY in 2023; led by residential and alternatives

·       Office continued to drive capital inflows with a commanding 56% share in 2023

·       Industrial & warehousing saw 2x investments compared to 2022

Institutional investments in Indian real estate sector maintained a steady momentum at USD5.4 billion, rising 10% YoY during 2023. The year witnessed highest levels of investment inflows since 2020 showcasing India’s resilience despite uncertainties in global markets otherwise. While foreign investments retained their dominance, forming 67% of the total inflows for the year, domestic investments also registered an impressive 66% annual increase at USD1.7 billion. Office sector continued to be the largest contributor in real estate investments for 2023 with 56% share in total inflows, attracting both global as well as domestic capital. While the overall investment inflows during the year remained sturdy, the last quarter of the year saw moderation. At USD0.8 billion, Q4 registered a 37% YoY drop in investments. Alternatives, meanwhile, had a 51% share in total inflows during Q4 2023, indicating strong demand in segments including data centres, student housing, life sciences, schools, etc.

While key global investment markets faced downside risks, India maintained its status being amongst the fastest-growing economies keeping investor confidence intact. While inflows from the US have witnessed a drop in 2023 as compared to 2020 levels, Canada and Singapore are increasingly establishing themselves as leading source of foreign capital in Indian real estate. These two countries accounted for 78% of the global real estate inflows into India during 2023. Noteworthily, investment inflows from APAC countries have been rising every year and have surged to 3.6X times in 2023, compared to 2020. Investors continue to view India favourably, owing to strong economic performance, improved regulatory framework, and sustained demand across various real estate segments.

“As India’s real estate sector closes yet another promising year, institutional investments saw an increase of 10% and stands at USD 5.4 billion—the highest since 2020. The investments in Indian real estate are more broad-based, with significant investments coming into education, shared spaces, and data centers, adding to a strong domestic upcycle in office, residential, and industrial areas. Investors from the APAC region have been showing an increasing appetite for Indian real estate, contributing to about half of the total foreign inflows during 2023. Looking ahead to 2024, investment activity is likely to remain unabated backed by robust domestic economic fundamentals, while a strategic integration of technology and ESG will play out in investment decisions.” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.

Domestic capital inflow surged 66% YoY during 2023

Domestic investors have emerged as active contributors, contributing 32% of the total real estate investments in 2023, compared to 22% share in 2022. While office market continues to be the frontrunner backed by investments from global players, domestic investors are focusing more on alternative and residential assets.

Office sector continues to be the frontrunner; investments in alternatives rebound significantly

At USD3.0 billion, investment inflows in the office sector rose 53% YoY during 2023, led by select large deals. The uptick reflects a rising interest in completed and pre-leased income-yielding office assets, showcasing investors’ sustained confidence in the long term potential of the sector. Notably, investors are actively establishing Joint Venture (JV) platforms to capitalize on emerging opportunities and participate in both existing and upcoming office projects. 2023 saw some significant platforms being established for development of office as well as residential assets.

“In the ever-evolving tapestry of India’s real estate landscape, while investors continue to diversify portfolios, the office sector continues to enjoy significant affinity. Fuelled by strong demand for Grade A commercial developments, investments in office sector continue to grow from strength to strength. As 2023 witnessed record breaking office space leasing activity, global institutional investors remained committed on building office portfolios in India. Office led investments had a commanding 56% share in total real estate inflows in 2023. Along with envisaged momentum in alternative assets, industrial & warehousing, and residential sectors in the next few quarters, office sector will continue to dictate India’s real estate investment ecosystem.” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

Investment inflows (USD million) –

*Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools etc

Source: Colliers

Industrial & warehousing surged 2x times in 2023

Industrial & warehousing segment saw a noteworthy two-fold rise with about USD0.9 billion inflows, marking the highest increase across all segments in 2023. This exceptional growth is credited to the sustained expansion of industrial sector, thriving on heightened consumption levels. As the sector evolves, we are likely to witness increased consolidation as well as institutionalisation in the sector. With micro-fulfilment centres, dark stores and AI driven supply chain becoming an integral part of industrial & warehousing segment, foreign investments in the sector are expected to rise multi-fold in the next few years.

Investments in Alternatives bounced back in the last quarter

After witnessing subdued activity in the first 3 quarters, investments in alternatives rebounded in the last quarter, taking the overall inflows in alternatives to USD650 million for the year. Q4 2023 accounted for 65% of the total investments in alternatives in 2023. Student housing accounted for about 60% of the investment inflows within alternatives during the year. Rising institutional interest has been driven by the surge in higher education enrolment, favourable demographic distribution pattern, and growing migration of students to cities. This trend reflects a constant recalibration of investor and developer interests which aligns with students’ preference for quality, and purpose-built accommodation.

Institutional investments in Indian real estate 2023

Asset class-wise investment inflows in Q4 2023 in USD million

Source: Colliers

Note: The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. The data has been compiled as per available information in the public domain

Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools, etc

City-wise investment inflows in 2023 and 2022 in USD million –

Source: Colliers

Note: The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. The data has been compiled as per available information in the public domain

Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools etc

Top Deals

Select key deals 2023

Source: Colliers

Note: The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. The data has been compiled as per available information in the public domain

Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools etc

Select key deals Q4 2023

Source: Colliers

Note: The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. The data has been compiled as per available information in the public domain

Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools etc

Top platform deals 2023

Source: Colliers

Also Read: Office sector sees robust demand with projected net absorption of 37-39 mn sq ft in 2023

The post Institutional investments in Indian real estate maintain steady momentum at USD5.4 Bn; inching towards pre-pandemic levels appeared first on Square Feat India.

Note: Commercial assets include office, retail, co-working, and hospitality projects.

Overall, the Indian real estate sector received institutional investments worth USD 679.9 million during the third quarter of 2023, up 82 per cent from the same period last year when inflow was USD 374.3 million.

Source: Vestian Research

The share of domestic investors accounted for 71% of total institutional investments received in Q3 2023. On the other hand, the share of foreign investors reduced to 27 per cent in Q3 2023 from 55 per cent in Q3 2022. However, the total institutional inflow in the July-September period fell 57 per cent when compared to the previous quarter due to a significant decline in foreign fund inflow.

Commenting on the report, Vestian CEO Shrinivas Rao said, “Institutional investments have slowed down during the September quarter due to limited interest from foreign investors amid a challenging global macroeconomic landscape.” However, Rao noted that large conglomerates are calling their employees back to the office which may inflate demand for office spaces across the country.

“As a result, upcoming quarters may witness increased investments on the back of this renewed demand from the office sector,” he observed.

Across various asset class, residential sector attracted the highest institutional investments during the third quarter of this calendar year, although the share has reduced to 44 per cent in Q3 2023 from 47 per cent a year earlier.

Share of commercial assets (office space, co-working, retail, and hotels) declined to 24 per cent in Q3 2023 from 40 per cent in Q3 2022.

Office assets attracted USD 164.1 million worth of institutional investments during July-September as against USD 150 million in the year-ago period.

On the other hand, share for the industrial and warehousing sector increased significantly to 28 per cent in Q3 2023 from a negligible share in Q3 2022.

The Government’s push for the ‘Make in India’ campaign and growing popularity of e-commerce resulted in increased demand for industrial spaces and warehouses across the country, Vestian said. “This led to significant interest from large investors.”

Also Read: Institutional investments in real estate rise 27% YoY at USD4.6Bn during Jan-Sep 2023; domestic investments up 1.7X

The post Institutional investments in the residential segment up 71% Y-o-Y during Jul- Sep appeared first on Square Feat India.

·       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 –

Source: Colliers

Top 3 PE investment deals in Q3 2023

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) –

*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)

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.

Also Read: Financial Institutions To Redevelop Stuck SRA projects

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·       Foreign investments accounted for 78% of the total investments in the sector

·       Data centers received USD1Bn of inflows since 2019, 51% of total investments in alternatives

Alternative assets in India received cumulative investments of about USD2.0Bn during the last 4-5 years (2019-H1 2023), led by foreign investors. Foreign investments accounted for 78% of the total investments in the segment, as investors continued to seek newer markets and newer avenues segments to diversify their asset portfolio while enhancing risk adjusted returns.

Institutional investors who were primarily focused on core asset classes have been building up their non-core assets around Data centres, Life sciences, Co-living, amongst others. Investments in alternatives have witnessed continued growth since 2019, driven by emergence of shared economy, increased digitalisation, and supportive government policy initiatives. During 2022, investment inflows in alternatives touched USD0.9Bn, a whopping 4.4X rise from 2019. Foreign investments in the sector have been the driving force and have witnessed a 6X rise in 2022 compared to 2019. Foreign investors continue to bet on the Indian real estate market, as India continues to be the fastest growing economies across APAC, Europe and Americas, with GDP pegged at 6.6% in 2023 by IMF. At a time when India’s economic outlook remains sturdy amidst global challenges, the business case for alternative investments will only strengthen.

Investments inflows in alternative assets (USD mn)

Source: Colliers

“As conventional asset classes like Office, Residential, Hospitality and Retail are evolved with significant investor and operator penetration, the alternatives are now poised for exponential growth over next few years.  Alternate asset industry which revolves around enhanced customer experiences, flexibility in Office, Residential, Technology usage and data storages is likely to provide significant partnership opportunities to investors and operators. While core sectors continue to dominate the institutional inflows in Indian real estate sector, share of alternatives has risen significantly from 3% in 2019, to 18% during 2022.” said Piyush Gupta, Managing Director, Capital Markets & Investment Services

Data centers dominate alternative investment inflows

Since 2019, data centers have received USD1Bn of institutional inflows, with inflows rising multi-fold in the last 5 years. While other alternative asset classes such as Life sciences, Co-living etc. have also seen increased traction, data centers have remained popular amongst institutional investors due to their strong growth fundamentals & a promising outlook. During the period under review (2019- H1 2023), data centers accounted for about 51% share in the total investments in alternatives.

Strong growth in data consumption has catapulted the growth and development of data centers in India, in the last five years. Investors are enthused by burgeoning demand and attractive returns of the data centers and have been actively infusing funds over the last 2-3 years. Data centers in India have given promising returns at about 16-18%, much higher than 8-9% in core office assets, which have further accelerated investors’ interest in the space.

As data centers are capital intensive and entail greater technical know-how investors are increasingly partnering with data center operators, who are ramping up expansions in the country. Global hyperscalers too are viewing India as a prime market for expansion to capitalize on the increasing demand from cloud usage. 2023 has seen some landmark investments and pre-commitments from global hyperscalers in India’s data center space, as they are looking to set up their own facilities to suit their requirements. Data centers are also witnessing large platform deals between developers and investors who are looking to grow their businesses multi fold. During May 2023, Lumina CloudInfra, a data center platform owned and managed by Blackstone’s Real Estate and Tactical Opportunities funds, announced its plan to invest more than USD300 million to develop a hyperscale data center campus in Navi Mumbai. Similarly, Reliance Industries partnered with Brookfield Infrastructure and Digital Realty for developing data centers in select locations in India.

Global investors have specifically favoured data centers over the last 5 years, accounting for over 90% of the total investments in the sector during the period. Foreign investments have helped data center operators to achieve the desired scale, foray new markets and achieve development and operational expertise by providing access to capital. At the same time, according ‘infrastructure’ status to data centers has facilitated concessional credit availability for the development of large-scale data centres. Data protection Bill 2023 will further aid growth and investments in the sector.

Investments in Data centers (USD mn)

“Global investors are increasingly allocating funds towards alternative assets, with their share in total investments rising from 55% in 2019, to 75% in 2022. While data centers continue to dominate investments in alternatives, there is an increased opportunity in sectors such as Co-living, with more organized players looking to enter the space. Rising demand coupled with strong growth fundamentals for Co-living sector remain highly supportive of required investments over the long-term. As the market grows towards maturity, the sector will likely witness allocation of more foreign capital, enabling investors to enter new markets and benefit through economies of scale, fostering institutional investments in the sector,”  said Vimal Nadar, Senior Director and Head of Research, Colliers India.”

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