LIQUIDITY PUSH: Private equity funds from Singapore have invested a total of $3.5 billion into the realty sector over the past two years
In the last two years, private equity (PE) funds from Singapore has tripled into the country's real estate industry, which now comprises 41% share of the total funds flowing into the sector.
In just over the past two years, Singaporean PE funds have invested a total of $3.5 billion into the industry, according to the available data.
During the two years prior to that, in 2015 and 2016, a total of $1.15 billion was received by various domestic realty businesses, whereas PE investors from US and Canada, put together, contributed $3.8 billion in the last two years.
"Singapore investors are betting big on Indian commercial real estate and other new sunshine sectors, including logistics and warehousing. Major Singapore-based private equity firms are funnelling billions of dollars into the country's real estate sector, particularly in South Indian cities," said Shobhit Agarwal, managing director & chief executive officer of Anarock Capital.
According to Anarock Capital's recent report on PE in the Indian real estate, of the total $14.01 billion PE funds that came into the country's realty sector between 2015 to 2018, approximately one-third were pumped in by the Singapore-based firms alone during the period – the highest among both domestic and foreign investors.
However, of the total PE inflows of $1.1 billion in the first quarter of 2019, there were no investments from any of the Singapore-based PE investors such as GIC, Ascendas and Xander.
Major players, including GIC, Ascendas-Singbridge and Xander, have been making steady investments here. In recent years. they have scaled up their investments across segments. Besides commercial spaces including office and retail, players like Ascendas are also diversifying their portfolios and eyeing sunshine sectors like logistics and warehousing, added Agarwal.
Shrinivas Rao, chief executive officer (APAC), Vestian, told DNA Money that, "The Indian real estate sector attracted a substantial quantum of PE investment in 2018; the foreign PE funds accounting for a lion's share of the total investment value. Significantly, real estate firms based in the southern region of India accounted for 47% share - the highest share of the total PE investment pie during 2018, with major foreign investors viz. US-based Blackstone and several Singapore-based firms such as GIC, Ascendas and Xander investing in the region."
The primary reason behind PE fund inflows into the sector is funding from banks and NBFCs have dried up over the last few years. Hence, Indian realtors are exploring overseas opportunities for debt and equity funding. This has resulted in Singapore investors topping the chart after they established a strong base in China.
Last month, DNA Money had reported about the commercial segments receiving higher PE investments in 2018. Secondly, south India saw the most PE transactions. But, there was a decline in PE investments in India as compared to the previous years.
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According to Anarock Capital's recent report on PE in the Indian real estate, of the total $14.01 billion PE funds that came into the country's realty sector between 2015 to 2018, approximately one-third were pumped in by the Singapore-based firms alone during the period – the highest among both domestic and foreign investors.
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