Private equity investors are actively engaged in the Indian warehousing market, particularly targeting subsectors such as e-commerce, logistics, and third-party logistics facilities, points out a recently relelased report highlighting the spike of investment in that segment.
According to recently released figures from Knight Frank India, private equity investments of $3 billion have been made in Indian real estate in the first half of 2024, an increase of 15 per cent on year from $2.6 billion year ago.
The report further points out how investor preference for sectoral preferences for private equity investments is shifting. The office sector, which has received the highest share of PE investments since 2018, was surpassed this time by the warehousing sector, which attracted more investments than the combined totals of the office, retail, and residential sectors.
Warehousing sector accounted for largest share at 52 per cent of total PE investments in the said period, followed by residential (29 per cent) and office (20 per cent). Investments in the warehousing segment reached $1.53 billion, showing a steep rise of 176 per cent on year. The spike is said to be driven by a single deal that accounted for the bulk of it.
PE investors are actively engaged in the warehousing market, particularly targeting subsectors such as e-commerce, logistics, and third-party logistics facilities, states the report.
Mumbai tops the list as it received the most investments at $1.7 billion from $1.24 billion year ago. Flows to the residential segment in the city was to the tune of $201 million. Bengaluru received around a fifth of the total investments, at $581 million. Around 69 per cent of these investments were dedicated towards the residential sector. The remaining 31 per cent were invested in office sector.
Knight Frank India CMD Shishir Baijal, said, “Indian commercial real estate continues to thrive due to factors like return to work, rising office absorption and strengthening rental values.
“Similarly, a year on year strengthening of residential market and continued consumer activities in retail further bolstered by economic growth has incentivised funds to adopt a long-term perspective towards investment in real estate,” Hindu Business Line quoted Baijal as saying.