New Delhi, Dec 19 (FN Agency) The Total Private Equity (PE) investments in the Indian Real Estate Sector stood at USD 54.8 billion through 659 deals from 2011 to 2022, according to a latest research report – ‘Investments in Real Estate; Trends in Private Equity Investments in India – 2022’ released by Knight Frank India, a leading international property consultancy, on Monday.
Apart from the slump in investments observed in 2020 due to the onset of Covid, PE investments in Indian real estate sector have remained strong in the last decade, with average investments of USD 4.6 billion per year from 2011 to 2022, the report stated. The Indian real estate sector recorded PE investments amounting to USD 5,134 mn (USD 5.1 bn) through 29 deals across office, warehousing, residential and retail sectors in 2022. On an annual comparative, PE investments witnessed a decline of 17 per cent Y-o-Y from USD 6.2 billion registered in 2021. Due to the rising inflation, higher interest rates, and geopolitical unrest, investors turned more cautious in 2022, which resulted in a decline in PE investments in India, it said. From 2011 to 2022, the Indian real estate sector observed exits to the tune of USD 9.8 bn from 250 deals across office, residential, warehousing and retail segments. Hyderabad recorded exits to the tune of USD 90 mn from 2011 – 2022. Among major cities, Mumbai, Bengaluru, and NCR jointly contributed 86 percent to total exits observed from 2011 to 2022.
The individual contribution of these cities stood at 46 per cent, 27 percent and 13 percent respectively. Mumbai recorded exits to the tune of USD 4,486 mn followed by Bengaluru with USD 2,635 mn from 2011 – 2022. Shishir Baijal, Chairman & Managing Director, Knight Frank India, said despite the intensifying global economic recessionary concerns and inflationary pressures, PE investments in Indian real estate assets provided a favourable investment avenue for both global and domestic institutional investors. The office segment remained the most popular investment category whereas the warehousing segment continued to observe a rise in interest amongst PE investors supported by the strong demand from manufacturing, e-commerce, and third-party logistics occupiers. Looking forward to 2023, we anticipate that inflation for most of the nations and the pace of rate hikes will moderate. With investors paying attention to the economy, governmental and regulatory framework, business results, and valuations, investments in India are expected to improve, he added.
However, the PE Investments in Hyderabad across real estate recorded USD 2,854 million during the period (2011 – 2022), accounted for more than 5 per cent of the total PE Investment recorded in India. The PE investment has been registered through 33 deals across office, warehousing, residential and retail sectors during the period, the report revealed. Office sector leads the PE investments in the city with a total of USD 2,081 mn followed by the residential sector with USD 476 mn, retail sector with USD 197 mn and warehousing sector with USD 100 mn. Residential sector registered the maximum number of 16 deals in Hyderabad during the period followed by Office ( 14 deals),, Retail (2 deals ) and Warehousing sector (1), the report stated.