We study the optical properties of a periodic array of InP/InAs/InP core-multishell nanowires by means of time- and spectrally resolved PL and PL excitation spectroscopy. Inhomogeneous broadening is present in our sample due to short range monolayer fluctuation and As–P intermixing at the interface, resulting in exciton localization. Acoustic phonon assisted migration of exciton to lower energy localized states leads to an energy-dependent PL decay time. A time-dependent redshift of the PL spectra (spectral diffusion) resulted from this is observed and a localization energy of ∼ 4 meV is estimated.