Institutional investments in India's residential segment experienced a significant decline, falling 39% annually to $695 million during January-September this year, according to data released by Colliers India. This represents a substantial decrease from $1,139.7 million recorded in the same period last year. According to reports from Business Standard, realty firms are increasingly preferring to fund projects through internal accruals rather than seeking external institutional investment. The latest data from Rediff Moneynews confirms this trend, with housing investments dropping to $694.5 million from the previously reported $695 million.
In contrast to residential investments, office assets demonstrated strong performance with 46% growth in investments to $2.16 billion during the first nine months of this year, as reported by Colliers India. This represents a significant increase from $1.48 billion in the corresponding period last year. The office segment's growth was primarily driven by domestic investors, who contributed more than 90% of institutional inflows in this segment during the first nine months of the calendar year. According to Rediff Moneynews, domestic investors played a pivotal role in the office market, with sustained leasing momentum across high-quality Grade A office assets continuing to reinforce the segment's attractiveness among investors.
Industrial and logistics parks showed steady growth with 15% increase in investments to $371.9 million from $324.7 million in the previous year, according to Colliers data. Additionally, investments in mixed-use projects rose 42% to $1,007 million in January-September from $707.8 million in the year-ago period. However, retail real estate investments experienced a significant decline, falling 78% to $85.2 million from $380 million in the same period. The hospitality sector showed remarkable growth, with investments jumping to $632.2 million from $88.2 million in the previous year, as reported by Rediff Moneynews.
According to Colliers India's CEO and Managing Director Badal Yagnik, residential investments were largely directed towards developmental projects while office investments were primarily focused on operational assets. As reported by Business Standard, the company expects evolving preferences across the risk-return spectrum to drive real estate investments in India, along with an uptick in foreign investment volumes in upcoming quarters. The institutional investment landscape includes Alternative Investment Funds (AIFs), family offices, foreign corporate groups, foreign banks, pension funds, private equity, real estate funds & platforms, foreign-funded NBFCs, listed REITs and sovereign wealth funds among other institutional investors. Looking ahead, with growing depth in domestic capital and evolving preferences across the risk-return spectrum, the company anticipates sustained momentum in real estate investments across different segments.
