Inflows of private equity into real estate totalled USD 2.7 billion in H1 2021

This is equivalent to 41% of the investment seen in 2020, indicating investor confidence in the sector, despite the second wave of the pandemic. During Q2 2021, commercial office assets remain the frontrunner, getting 40% of the share of investment.

Inflows of private equity into real estate totalled USD 2.7 billion in H1 2021

According to a Savills India report, private equity investment inflows into real estate in India stood at USD 2.7 billion during the first six months of 2021. This is equivalent to 41% of the investment seen in 2020. It clearly indicates investor confidence in the sector, despite the second wave of the pandemic. However, the investment declined by 54% in the second quarter of 2021, as compared to the previous quarter.

During Q2 2021, commercial office assets remain the frontrunner, getting 40% of the share of investment. The primary reason for this can be attributed to the resilience displayed by grade office assets, successful listing, and operations of the three REITs in the country.

Although occupancy levels in Mindspace Business Parks REIT and Embassy Office Parks REIT reduced by 1-2% by the end of March 2021 as compared to the previous quarter, the rents remained stable. Brookfield India REIT registered a successful IPO with 8 times subscriptions and strong participation from a diverse mix of investors.

Diwakar Rana, Managing Director, Capital Markets, Savills India, said, “Despite the pandemic, the first half of the year witnessed deals by both domestic and foreign investors in the commercial office assets segment. This displays the strong demand and resilience of the office segment and reaffirms the confidence of investors in the sector. Global investors can see the potential scope of investing in Indian realty with the consistent performance of large foreign institutional firms. More such transactions are likely in the future.

The consumption pattern across grade retail assets showed a positive outlook with swift recovery in the first quarter of 2021. According to Savills India research, a renewed interest is visible in the retail segment by private equity institutional investors with the segment accounting for 33%, the second-highest share, of investment inflows during Q2 2021.

Foreign investors such as CPPIB and GIC formed platforms to invest $285 million (Rs. 21 billion) in retail assets in Kolkata, Mumbai, and Pune, respectively.

Source: Financial Express