Private Equity Investment In India’s Real Estate Rose 3% In 2019: Report
A coin is dropped into a piggy bank in this arranged photograph. (Photographer: Ron Antonelli/Bloomberg)

Private Equity Investment In India’s Real Estate Rose 3% In 2019: Report

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Private equity investment in India’s real estate sector rose 3 percent to Rs 43,704 crore during 2019 on increased interest of foreign investors in commercial properties, property consultant Cushman & Wakefield said on Thursday.

At 32 percent share, Mumbai’s property market attracted the most PE investment in 2019, followed by Bengaluru at 14 percent, Pune at 7 percent, and Hyderabad and Chennai at 6 percent each.

According to the data, private equity investment in the office segment declined to Rs 21,890 crore in 2019, from Rs 23,930 crore in 2018, while the housing segment saw 22 percent fall in PE inflows to Rs 7,457 crore during the period under review, from Rs 9,600 crore a year ago.

However, PE investment in retail and warehousing segments increased in 2019. The retail segment attracted Rs 5,500 crore last year as against Rs 1,990 crore in 2018. The warehousing space witnessed Rs 3,810 crore-worth of investments in 2019 as compared with Rs 2,870 crore in the previous year.

"With volumes touching Rs 43,700 crore in 2019, in comparison to Rs 42,440 crore in 2018, confirms the confidence of institutional investors in Indian real estate market," said Anshul Jain, country head and managing director at Cushman & Wakefield.

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"In addition, strategic investments in alternative segments like co-living/student housing, co-working, and data centres are likely to garner active interest from institutional investors," he said.

According to the Cushman & Wakefield data, foreign investors contributed 72.9 percent to total investment inflows during 2019. Equity capital infusion formed 80.5 percent of the total investment inflows during 2019, up from 64 percent share in 2018.

"Joint ventures between foreign investors and domestic entities remain a bright spot indicating long term and patient capital being invested into the sector. Such partnerships aimed at greenfield, brownfield development especially in commercial (office and retail) and industrial segments is a sign of increasing institutionalization in the real estate sector," the consultant said.

Greenfield development refers to the real estate development of land not previously used for residential, commercial or industrial purposes.

Brownfield development means to start a project based on prior work or to rebuild (engineer) a product from an existing one.

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