Residential segment witnesses higher PE exits
Foreign investors are funding Indian real estate market after the release of Press note 2 in 2005 which opened up construction and development for Foreign direct investment (FDI). Many investors who had invested at that time, largely in residential sector, are now heading towards maturity and are withdrawing their prime investments.
According to a report by Jones Lang Lasalle, out of the $13 billion invested in the real estate sector, about $3.2 billion of exit has been recorded through 80 transactions.
Residential segment has seen greater number of investor exits followed by the commercial sector. Residential segment, being not much affected by global factors, has remained strong throughout the financial crisis resulting in good returns. Thus, 46% of the exit for investors has taken place in through the residential space.
Typically, for any PE fund manager, the biggest parameter for any investment happens to be exit.
Wachovia, HDFC, Kotak Realty, ICICI ventures and Indiareit are some of the funds that have managed to give above average returns while offshore funds were the biggest losers.
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Source: Forbes India
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