Asia Pacific (APAC) investor optimism set to boost institutional investments in Indian real estate in FY25

Colliers’ FY25 Global Investor Outlook highlights robust optimism among Asia Pacific (APAC) investors, with 67% planning to allocate capital to the region in FY25, driven by expectations of regional economic growth and narrowing pricing gaps. The report notes that institutional investments in India’s real estate sector are poised to gain momentum. APAC investors are expected to commit over 30% of their total assets under management (AUM) to real estate over the next five years. Sectors such as industrial and logistics, office, and multi-family/build-to-rent properties are projected to dominate investor interest, with 61% targeting Central Business District (CBD) office assets. ESG-compliant (Environmental, Social, and Governance) office properties are anticipated to command valuation premiums in the coming years. 

India is positioned to benefit significantly from this investor confidence, supported by its strong domestic economy. Institutional inflows into Indian real estate have totalled US$ 19 billion (Rs. 1,60,531 crore) since FY21, with 40% directed towards office assets. In FY24, investment volumes reached US$ 4.7 billion (Rs. 39,710 crore) in the first three quarters, 87% of FY23’s total inflows reflecting strong momentum for FY25. According to Managing Director at Colliers India, Mr. Piyush Gupta, the office sector is set for record absorption driven by global capability centres (GCCs) and domestic demand. The industrial and warehousing sectors are witnessing growth from e-commerce and third-party logistics (3PL), while residential real estate is attracting investor participation in Tier I cities through joint ventures. Emerging segments like data centres, senior living, and life sciences also hold long-term potential. However, Colliers’ Managing Director of Global Capital Markets for APAC, Mr. Chris Pilgrim, cautioned about the limited availability of investable-grade assets in these sectors, presenting a supply challenge despite strong demand. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.