PE Firms invest $1.8 b in office sector in first 6 months this year

Institutional investments in the office sector reached a record-breaking $1.8 billion in Q2 of calendar year 2023, underscoring sustained investor confidence in the sector’s growth and return prospects. The office sector demonstrated its strength by achieving 2.5 times year-on-year growth during H1 2023, amounting to $2.7 billion.

Notably, the office sector dominated the total inflows during this period with a commanding 74% share, while the residential sector trailed with a mere 12% share.

Prominent global funds such as GIC, CapitaLand India Trust, Bain Capital, CPPIB, and PAG Credit and Markets were actively engaged in the market, finalising significant deals. Institutional investors continue to show their confidence in the office sector due to the rising opportunities, resilient demand, and promising growth prospects anticipated in the next 2-3 years.

“The office sector is witnessing a recalibration globally, and hence the decision to invest is also taking longer. Further, interest rates and inflationary pressures are also temporarily keeping the investors in a wait-and-watch mode as the investors reprice the global macro risks,” said Piyush Gupta, managing director, Capital Markets & Investment Services at Colliers India.