Private equity investment in real estate touch Rs 135 billion in Q1 2021: Report

NEW DELHI: Private equity (PE) investment inflows into the Indian real estate sector stood at USD 1.9 billion (Rs 135 billion) in the first quarter of 2021, according to a report by Savills India.

In Q1 2020, PE investment into the sector was at USD 0.65 billion.

“The noticeable recovery in the real estate and the increased momentum of investment inflow into the sector is a clear sign of investors’ regaining confidence post the slowdown induced by the pandemic last year. The strong drive for commercial real estate in cities like Bengaluru, Hyderabad along with increased demand for residential are likely to play pivotal role in attracting more PE funds going forward,” said Diwakar Rana, managing director, Capital Markets, Savills India.

Despite the remote-working culture, commercial office assets remained the frontrunner during Q1 2021, garnering more than half (58%) share of the investment pie.

All the quarterly investment came from foreign institutional investors and was mostly concentrated in the two southern cities of Bengaluru and Hyderabad.

The increased demand for warehousing facilities, especially from e-commerce and third-party logistics players, has steered private equity institutional investments into the sector.

During Q1 2020, investors such as Blackstone and Ascendas Firstspace formed platforms to develop and invest to the tune of Rs 53 billion in industrial facilities in the cities of Pune, Bengaluru, Hyderabad and Chennai.