PE funds look for mature markets
Jones Lang La Salle said that though smaller cities are offering a great deal of opportunities for real estate investments, this year, private equity funds will flow into large cities like Delhi, Mumbai, NCR and Bangalore as investors are looking for matured markets than speculation driven one.
From the occupiers’ perspective, investors are looking to invest in markets which are matured and where lots of activities are happening.
PE Funds will raise weak real estate funds and it is also likely to buy bad loans of banks which have been sold to asset reconstruction companies (ARCs).
A number of funds which had invested in 2007-2008 are looking to exist this year, some of them at lower internal rates of returns. Investors are preferring to exit at lesser returns as they are not ready to take higher risks.
Some of the funds may look for an exit which had invested during 2007-2008. But given the overall uncertainties, these funds may also look at postponing exits to 2014.
This year, a number of new domestic real estate PE funds backed by corporate entities are also likely to be launched.
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