MUMBAI, 2 August, 2019: A majority government at the Centre is gradually reviving private equity’s confidence in Indian real estate – especially the commercial sector. ANAROCK research indicates that PE players infused USD 580 mn into Indian real estate in the month of June, immediately after Modi 2.0 took charge. That said, the general elections predictably cast a shadow on funding into Indian real estate.
“Mumbai attracted the maximum (24%) of the overall inflows into the sector amounting to USD 530 million,” says Shobhit Agarwal. “Pune followed with nearly USD 250 million coming in from institutional investors – anincrease of 97% for Mumbai’s immediate neighbour since H1 2018.”
H1 2019 Funding – Sector-wise Breakup
- Commercial real estate attracted the lion’s share of investments with64% amounting to over USD 1.4 bn
- Residential real estate attracted over USD 270 mn
- Retail real estate attracted USD 260 mn
- Logistics & warehousing attracted nearly USD 200 mn
Even while caution prevails over the current market dynamics, the incumbent’s government proactive initiatives across sectors will doubtlessly cause more private equity inflows into the real estate sector. While Indian commercial real estate’s overall attractiveness for institutional funds is now well-established, the residential sector is also likely to become increasingly interesting in the back of the government’s determined push to affordable housing.