Private equity investors pump in over Rs 17,000 crore into real estate
Inflows in residential assets highest in 10 quarters. Mumbai attracts highest private equity investment
Private equity inflows into real estate rose 15 percent year-on-year to Rs 165.3 billion (USD 2.6 billion) during the first quarter, eclipsing the inflows of the first quarter of the previous 11 years, says global real estate consultancy Cushman & Wakefield. The residential sector gained prominence in inflows with the highest ever inflows in 10 quarters, as investors look to gain from government incentives in affordable housing.
During the quarter, private equity inflows into the residential sector more than doubled (year-on-year) to Rs 85.18 billion (USD 1.32 billion), backed by a large platform transaction between Housing Development Financial Corporation (HDFC) and Abu Dhabi Investment Authority (ADIA). Mumbai accounted for approximately 19 percent of the total deals in the residential sector.
Mumbai witnessed the highest investments during the quarter with inflows of Rs 63.3 billion (USD 947 million), primarily led by the office sector. The city also noted the largest investment transaction for the quarter, the stake acquisition by Blackstone in two office projects of Indiabulls Real Estate, says the report.
Office sector, recorded inflows of Rs 61 billion (USD 913 million), which is a 40 percent decline from the corresponding quarter last year. The decline in investments is due to the postponement of the closure of certain notable transactions to forthcoming quarters.
The country’s buoyant office sector continues to attract heightened interest from foreign investors who are building up a portfolio of rent-yielding assets and thereby altering the ownership pattern (between developers and private equity investors) of office stock in major cities.
The sunshine sector of Industrial & Warehousing received inflows of Rs 3.5 billion (USD 52 million) in a Logistics Park near Chennai as part of a platform formed between Ascendas-Singbridge and Firstspace Realty. The sector received a significant investment of INR 65.36 billion (USD 1.01 billion) during 2017, the report says.
Retail developments in Tier-II cities have been attracting the attention of investors due to the investment prospects in these cities backed by demand for space by retailers amidst lack of quality retail spaces. In continuation of this trend, Blackstone acquired a majority stake in Esplanade Mall, Bhubaneswar for Rs 2.5 billion (USD 0.04 billion). Over the last two years, investors have ploughed in funds in tier II cities like Coimbatore, Surat, Mohali, and Indore.
“The strong inflow level is a testimony to the attractiveness of the Indian real estate market for institutional investors. Affordable housing projects continues to see interest from institutional investors, driven by strong end-user demand and government incentives for both developers and home buyers. We foresee inflows into this segment to be on the rise over the next few years. During the remaining part of this year, we are also likely to witness some marquee deals in the office sector by private equity majors (including pension and sovereign funds), amidst strong leasing and limited availability of quality assets in core markets. The industrial and warehousing sector, backed by key economic reforms (GST, infrastructure status to logistics, 100% FDI in e-commerce marketplace) is also emerging as a compelling opportunity for investors,” says Anshul Jain, country head and managing director India, Cushman & Wakefield.
Related Topics
Trending News & Articles
While the Uttarakhand High Court has asked to block 857 websites, the Ministry of Electronics and IT (Meity) found 30 portals without any pornographic content.
...
Recently posted . 64K views . 1 min read
The four boys as well as five school officials, including the director and principal, were arrested after the incident. The minors were presented before the Juvenil...
Recently posted . 10K views . 1 min read
Rahul was having an Italian passport and was carrying suitcase full of dollars. Some say it was about was it $2 million.
Rahul and his girl friend was th...
Recently posted . 9K views . 7 min read
True – Tr...
Recently posted . 8K views . 83 min read
More in National
External affairs minister Sushma Swaraj declared on Friday that passports will now be in both Hindi and English, and not simply in English.
She announced...
Recently posted. 965 views . 3 min read
Ordinance on rape a knee-jerk reaction: activists
Death penalty for rape of girls upto 12 years will deter t...
Recently posted. 990 views . 2 min read
The man underwent a surgery at Safdarjung Hospital but doctors said it is difficult to say whether he will be able to talk again, according to the police.
...
Recently posted. 775 views . 1 min read
Recently posted . 1K views
Recently posted . 1K views
Recently posted . 2K views
Recently posted . 3K views
Recently posted . 4K views . 57 min read
Recently posted . 3K views . 31 min read
The affidavit shows Hema Malini presently owns total wealth including bungalows, jewelleries, cash, jewelleries, shares and term deposits worth over Rs 101 crore,...
Recently posted. 926 views . 1 min read
The India State of Forests Report 2017 should set the alarm bells ringing.
Recently posted. 952 views . 0 min read