PE Investment in real estate jumps by 24 pc per year in July-September to Rs 3,500 cr: report
Private equity investments in real estate increased 24% year-on-year to $ 477 million (around Rs 3,500 crore) during the period July-September 2021, but fell 45% from previous quarter, according to Savills India.
PE’s inflows into real estate were $ 385 million in the period last year and around $ 900 million in the prior quarter.
In its latest “India Investment Market Watch” report, Savills India attributed the temporary slowdown in investment activity to the delay in investor decision-making in the face of the COVID-19 pandemic.
According to the report, data centers recorded the highest share of around 34% of total private equity investments in the third quarter of calendar year 2021.
Data centers have proven to be resilient to the impact of the current pandemic in India. With the growing need for digital connectivity leading to a surge in data usage, the demand for data centers has also skyrocketed, ”the report says.
The consultant said the investment inflow amounted to USD 3.3 billion (Rs 23,300 crore) between January and September 2021, nearly half (49%) of the total investment inflow that the sector experienced during the whole of 2020.
In the calendar year, SE investment in real estate amounted to $ 6.6 billion compared to $ 6.7 billion in 2019, $ 6 billion in 2018, $ 7.7 billion dollars in 2017 and $ 5.7 billion in calendar year 2016.
“As the immunization program accelerates, we will see business confidence gain ground. Despite the pandemic, the year 2021 continued to see some brand-name transactions across all segments of real estate, ”said Diwakar Rana, Managing Director, Capital Markets, Savills India.
The September 2021 quarter also saw India’s first investment by a global pension fund in a life sciences R&D asset, where Ivanhoé Cambridge and Lighthouse Canton jointly invested $ 100 million (740 crore rupees ) at life science R&D facilities in Genome Valley, Hyderabad.
Savills expects India to strengthen its position in the global life sciences arena in the post-pandemic world, presenting a lucrative opportunity for private equity investors focusing on R&D (research and development) in life sciences.
Savills Plc is a global provider of real estate services listed on the London Stock Exchange.
Savills India is a Savills Plc group company and is a leading international professional real estate consultancy firm.
Founded in India in 2016, the company employs more than 400 professionals.
Recently, real estate consultant JLL India released a report suggesting that institutional investment (which includes equity and other inflows) in real estate rose 17% year-on-year to $ 721 million over the course of the period July-September 2021.
During the period January-September 2021, institutional investment increased to 2,977 million USD, compared to 1,534 million USD during the period of the previous year, according to data from JLL.
Institutional fund flows include investments from family offices, foreign business groups, foreign banks, own account books, pension funds, private equity, real estate funds-developers, foreign-invested NBFCs and sovereign wealth funds. It also includes benchmark investors in real estate investment trusts (REITs).
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