Even as real estate in India has struggled over the past few years, private equity investors appear quite optimistic about its prospects.
A report by Knight Frank says that PE investments in real estate rose from Rs 17,200 crore in 2014 to Rs 59,100 crore, a growth of a whopping 36 per cent compounded.
Much of the PE investments found their way into a commercial real estate. Since 2011, a total of Rs 57,300 crore has been invested into space
According to the Realty Asset Monetisation 2018 – An Overview by Knight Frank, Mumbai captured 40% of private equity investments into office assets in India while NCR saw Rs 11,350 crore being invested.
Bengaluru attracted private equity investments into office assets to the tune of Rs 7,850 crore.
Retail and warehousing have also seen a strong performance during the last four years.
The warehousing sector has seen an investment of Rs 28,136 crore since 2014, says the report, while Rs 10,362 crore has been invested into retail assets since 2011.
When it comes to retail, nearly half the incremental capital has gone into the new development and under-construction retail assets.
“The real estate industry has been through a churn over the past few years due to a slew of structural reforms like demonetisation, GST and RERA. This led to a reduction in investment risk perception coupled with the availability of matured assets,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
The exuberance by PE investors continues in the current year with Rs 33,700 crore already being invested in the first half of 2018.
“While office market has continued to remain strong, a closer look indicates that once-overlooked segments of retail and warehouse have seen a renewed interest from global institutional investors,” said Baijal.