During the calendar year 2018, real estate sector attracted announced investments worth Rs 50,000 crore across 65 transactions
The commercial segment of real estate attracted most private equity (PE) investments during 2018. South India, especially, saw the highest number of PE transactions. However, there was a decline in PE investments in India as compared to the previous years.
During the calendar year 2018, real estate sector attracted announced investments worth Rs 50,000 crore across 65 transactions.
“Foreign funds led the way, with a majority of the total PE investments secured by the commercial sector,” said Shrinivas Rao, CEO (APAC), Vestian Global Workplace Services.
According to Rao, compared to previous years, increasing PE participation in the residential sector too was observed in 2018, primarily owing to the government’s thrust on its ‘Housing for All’ initiative with various incentives for developers.
Most PE investment made its way to the southern region of India with South India accounting for about 47% of the total share of PE investments in realty during 2018. This region also recorded the maximum number of PE deals.
“The highest PE investment, value-wise as well as in number was recorded in Mumbai, while the average investment size was the largest in Bengaluru,” added Rao.
Even Shobhit Agarwal, MD and CEO, ANAROCK Capital concurs with Rao. “The commercial office segment saw the highest inflows, accounting for a massive 70% share of the total institutional investments into the industry in 2018. Retail real estate came in a distant second with 7%, and the residential sector drew the least private equity among the three sectors with less than 7% of the overall share”, Agarwal said.
Anarock Property Consultants’ latest report on ‘Private Equity in Indian Real Estate’ mentions that out of the total PE inflow of Rs 97,000 crore into the sector over the last four years, 2017 and 2018 collectively saw maximum investments at Rs 60,000 crore.
Despite declining deal numbers since 2015, the average deal size has increased as much as 172% over the last four years– from Rs 325 crore in 2015 to Rs 890 crore in 2018.
CAPITAL BUILD UP
- Rs 97,000 cr – Total PE inflow into the sector over the last four years
- Rs 50,000 cr – Announced investments realty sector attracted during 2018
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