Commercial realty bags 88% of institutional investments in Q1 FY24: Vestian

Overall institutional investments into the sector reached $1.6 billion during the period, registering a 33.3% increase versus the first quarter of 2023.

The commercial segment of the Indian real estate sector bagged a lion’s share of 88 per cent of the total institutional investments into the sector in the first quarter of the current fiscal, a new report by property consultancy Vestian revealed on Tuesday. This figure stood at 39 per cent in the fourth quarter of FY23.

Overall institutional investments into the sector reached $1.6 billion during the period, registering a 33.3 per cent increase versus the first quarter of 2023.

“This upward trajectory in investments demonstrates renewed interest from institutional investors amidst the challenging macroeconomic landscape,” said Vestian chief executive Shrinivas Rao, adding that the surge suggests a significant upside potential for the overall sector.

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Betting on India’s positive growth story, foreign investors contributed a dominating share of 92 per cent , the report noted. About 94 per cent of the investment deals were multi-city in nature, it added.

In contrast to a renewed demand for office spaces, the residential real estate segment saw an 83 per cent plunge in its share of institutional investments at 4 per cent in Q1 FY24 as opposed to 27 per cent in Q4 FY23.

Furthermore, Institutional investments on a year-on-year basis witnessed a 40.7 per cent decline, reflecting a certain level of market volatility, the report highlighted.

However, assuaging stakeholder concerns, Rao said: “The sector is likely to garner increased traction in the upcoming quarters on the back of robust GDP growth and a strong pipeline of upcoming infrastructure developments.”