According to Savills India's recent report, private equity investment inflows into the real estate market in India were US$ 2.7 billion (about Rs 14,300 crore) in H1 2021. This represents 41% of investment inflows in the industry for the full year 2020, indicating that investor confidence remains strong despite the pandemic-related slowdown.
"However, we witnessed a 545 QoQ drop in inflows during Q2 2021, equivalent to USD 865 million (Rs 6,300 crore)," the report stated.
Despite the popularity of remote working, commercial office assets remained the leader in Q2 2021, accounting for roughly 40% of total investment. This is supported by the investment-grade office assets' durability in these challenging circumstances, as seen by the successful listing and operation of three REITs in India.
While occupancy levels at Embassy Office Parks REIT and Mindspace Business Parks REIT fell by one to two percentage points in March compared to December 2020, rents remained constant. Brookfield India REIT had a successful initial public offering (IPO) with an 8x subscription and robust participation from a diversified group of high-profile investors.
The consumption pattern across investable grade retail assets improved in Q1 2021, quickly returning to pre-Covid levels.
"We saw increasing interest in the retail segment from private equity institutional investors during Q2 2021, with the segment accounting for the second-largest proportion (33%) of investment inflows," according to the report.
Foreign investors like CPPIB and GIC created platforms to invest USD 285 million (Rs 2,100 crore) in retail properties in Kolkata, Mumbai, and Pune.