Private equity inflows into real estate increased 22 per cent to Rs.28,300 crore (USD 4.24 billion) as of September 30 2016, up from Rs. 23,200 crore (USD 3.60 billion) recorded during the same period last year.
Real estate consultancy Cushman & Wakefield in its report on Private Equity investments in Real Estate (PERE), finds about Rs. 9,200 crore (USD 1.4 billion) of these investments were recorded during the third quarter of 2016.
While the number of deals closed during the third quarter moderately declined by 3 per cent quarter on quarter to 32, the total investments increased by 1.2 per cent, reflecting increased confidence amongst investors to make larger investments.
Owing to the continued interest in pre-leased office assets, the YTD 2016 investments in the commercial office assets have already surpassed the total investment received during the calendar year 2015.
Anticipating a revival in the sector and given the potential to list under the real estate investment trust (REIT) retail assets are attracting large investments from various funds.
Anshul Jain, Managing Director, India, Cushman & Wakefield in a statement said, “There has been a steady shift in ownership of assets, especially office, from being privately held to institutionally held, moving in line with the global trend. This will further assist the Indian market to attract more and more investment in the sector.”
“It also opens door to the successful implementation of REITs in India,” he said.
Attracting 43 per cent of the total investments, Mumbai retained its top position, Delhi NCR being a distant second, accounting for 27 per cent of the share. While Mumbai witnessed inflows of about Rs.12,113 crore (USD 1.8 billion), Delhi NCR received Rs. 7,730 crore (USD 1.2 billion). Hyderabad is fast emerging as one of the hotspots for PE interest in real estate.