According to property consultant Savills India, private equity (PE) investment in real estate jumped over threefold year-on-year to $ 2.7 billion (Rs 14,300 crore) in the first six months of this calendar year mainly driven by rising demand for commercial assets.
PE inflows stood at $ 2,729 million in the first half of 2021 as against $ 870 million in January-June 2020, the report said. It may be noted that during the entire 2020, PE inflow was $ 6.6 billion.
The jump in PE inflows indicates that investors’ confidence remains intact despite the pandemic-struck slowdown period.
In the first half of 2020, private equity investment inflows across India stood at $870 million. However, in the second quarter of 2021, the Indian real estate market saw an investment of $865 million (Rs 63 billion), a 54 per cent decline from the previous quarter, the report says.
Meanwhile, the Savills report said commercial office assets in India remained the frontrunner during the second quarter of 2021, garnering about 40 per cent of the investment pie. This is on the back of the resilience displayed by the investable grade office assets, reflected in the successful listing and operations of the three real estate investment trusts (REITs) in India.
During Q1 2021, the consumption pattern across investable grade retail assets improved and recovered swiftly to pre-Covid levels of the Q1 of the 2020 calendar year.
According to the report, the sector witnessed a renewed interest in retail segment by private equity institutional investors as the segment accounted for the second-highest share (33 per cent) of investment inflows during Q2 2021.
Foreign investors such as CPPIB and GIC formed platforms to invest to the tune of $ 285 million (Rs 21 billion) in retail assets in the cities of Kolkata, Mumbai, and Pune, the report highlighted.