PE investments double in the first half of 2014 for Indian real estate compared to H1 2013
In the first six months of 2014 the private equity (PE) investments in the real estate sector jumped over two-fold to Rs 4,100 crore. It is expected that about Rs 7,900 crore will be raised in the second half. So in total it is likely to cross Rs 12,000 crore by the end of the year. The property consultant Cushman & Wakefield (C & W) came up with a report regarding this. According to the report, the PE investment in the sector was Rs 6,450 crore in 2013.
Indian real estate has evoked a lot of interest in the global markets and there is an upward trend visible in the trend of committing funds for Indian real estate through the PE way. Housing projects and leased office purchases are receiving these funds.
In the first half of 2013 only Rs 1,650 crore was raised and the total investment the first half of 2014 is more than double that investment. The C & W report also stated that this is also the highest levels of investments in the first half of the year since H1 2009.
Of the total PE inflows in the first half, housing segment accounted for nearly 60 % at Rs 2,357 crore. Office assets contributed Rs 1,435 crore and retail Rs 300 crore. The C & W report also mentioned that in the residential asset class, private equity funds are now being viewed favourably by the developers. The PE money which is raised is being used for de-risking projects and as strategic long term partnerships for further expansion and development of the projects.
The total number of deals in the first half of 2014 increased to 28 compared to 13 in the year-ago period. Average deal size increased by 16 % to Rs 146 crore. In the first half Bengaluru witnessed the highest levels of transaction activity. There were investments in the Bengaluru properties of Rs 2,005 crore, a sharp increase from Rs 103 crore in the year-ago period.
During the H1 2014 period Mumbai received a PE investment of Rs 1,140 crore, while transaction volumes in NCR and Pune were recorded at Rs 580 crore and Rs 167 crore, respectively.
Source- Financial Chronicle
C & W, Cushman & Wakefield, PE inflows, PE investment, Private Equity, Private equity investments, Real Estate Sector
