Indian commercial real estate retained its top position. In the backdrop of robust office space take-up, falling vacancy levels and rising rentals, the segment continues to be a preferred destination for PE investment in 2019.
As per recent reports, Indian real estate attracted more than $5 billion PE investment in 2019. Out of the total real estate PEs inflow, over 66% or $3.3 billion was infused in the commercial real estate.
Meanwhile, both retail and residential segments saw an uptick in investments in 2019 against the against the preceding year, showed data from ANAROCK Property Consultants.
Mumbai MMR continued to maintain its top position in grabbing the lion’s share of PE investment. However, the surprising element came from Delhi NCR which managed to increase its PE inflow to become second-most attractive real estate destination for PE players. Overall, about 53% overall PE share in Indian real estate in 2019 has gone to the two mega regions of MMR and NCR.
Another surprising and comparatively different aspect seen in 2019 was investor’s interest in last-mile funding for stuck housing projects. The trend, if continues for some time, along with the government support of Rs 25,000 crore for stressed projects, will go a long way in revamping the diseased residential real estate.
“Apart from low execution, land title and sales risk, the segment also stands apart due to faster return of the capital with higher than moderate returns,” ET quoted Subhash Udhwani, founder of real estate-focused boutique investment bank, Elysium Capital, as saying.
Another segment that caught investors’ fancy was the retail segment. This section saw a jump of 170 percent Y-O-Y in the PE investment from $355 million in 2018 to $ 1 billion in 2019.
The IT hub of Pune and Bengaluru managed to grab PE funds of around $390 million and $615 million respectively in 2019 with rise in inflow of 210% and 47%, respectively in a year.
Here is more on real estate trends.