Foreign investors pour into Indian real estate; private equity investments jump this much in 2019

Source: Published in the financial express June 26, 2019 

Private equity investment in real estate rose 26 per cent in the first half of this year to USD 3.9 billion (nearly Rs 28,000 crore) driven by higher inflow in commercial and warehousing projects, according to property consultant Colliers. 

Private equity investment in real estate rose to 26 per cent in the first half of this year to USD 3.9 bln

Private equity investment in real estate rose 26 per cent in the first half of this year to USD 3.9 billion (nearly Rs 28,000 crore) driven by higher inflow in commercial and warehousing projects, according to property consultant Colliers. PE inflows from foreign investors increased 28 per cent during the first six months of the 2019 calendar year. “During the first six months of 2019, the real estate sector witnessed private-equity (PE) inflows of USD 3.9 billion (Rs 27,767 crore), eclipsing the first halves of previous years,” Colliers International said in a report.  The increase in PE inflow signals rising confidence of institutional investors in India’s premium office spaces, retail properties and warehousing sector, it said.

“Foreign funds remain active in the real estate market, with inflows from such investors rising 28 per cent in H1 2019. While foreign funds continue to be active in the commercial office space, they are also investing into the logistics sector,” the report said. The sector is at an inflection given the 3Rs – Reforms, REITs, and Results of the recently concluded elections. The year 2019 will see the bulls at play, with phenomenal capital influx in the office and logistics space,” said Suresh Castellino, Executive National Director, Capital Markets & Investment Services at Colliers International India.

Mumbai attracted maximum (27 per cent) of the total PE inflows, garnering around USD 1.05 billion of investments.
Pune saw 10-fold increase in PE inflow to USD 237 million in January-June period of this year. During the first six months of the year, investments in commercial office assets accounted for 42 per cent share of total investments. Investors pumped in USD 1.2 billion into the retail sector, accounting for 31 per cent share. “We foresee the current year to create a new record for investments in real estate, with investors viewing retail and logistics assets favourably in addition to commercial office assets,” said Megha Maan, Senior Associate Director, Research at Colliers International India.