Five Billion USD invested in Indian Real Estate via Private Equity in 2019: ANAROCK

Five Billion USD invested in Indian Real Estate via Private Equity in 2019: ANAROCK

Indian real estate sector witnessed some improvement in year 2019. Indian government offered support in many ways and projects were cleared with RERA agencies in different states. Indian real estate sector is expected to grow in 2020 and investor interest might improve this year. A report by ANAROCK about private equity deals and investments in Indian real estate sector follows.....

Indian real estate attracted more than USD 5 bn private equity inflows in entire 2019 - recording a marginal drop of 2% against the preceding year - reveals ANAROCK’s latest study. MMR and NCR were the top favourites for private equity investors in 2019; together, the two regions received close to USD 2.7 bn PE funds, comprising a whopping 53% overall share. Previously in 2018, rather than NCR, it was Hyderabad that was on top in the radar of private equity investors.

The commercial segment continued to lure investors in 2019, with total PE inflows crossing USD 3.3 bn - though reducing by 13% on yearly basis. Meanwhile, both the retail and residential segments saw an uptick in investments in 2019 against the preceding year.

“Total PE inflows in Indian real estate remained more or less the same in 2019 against 2018. However, NCR once again emerged as a major hotbed for private equity activity in 2019. Besides office real estate, the retail sector helped NCR gain traction from both foreign and domestic funds,” says Shobhit Agarwal, MD & CEO – ANAROCK Capital. “Notably in 2019, other than commercial real estate, the retail segment also garnered considerable attention from private equity, based on the high demand for organized retail spaces across the country. Residential saw some green shoots of revival in 2019 and this will continue in 2020 as the Government’s distress funds are deployed. In sharp contrast to previous years, investors are now showing a keen interest in last-mile funding for stuck/delayed residential projects. This, along with the Government support of INR 25,000 crore for stressed projects, will go a long way in relieving residential real estate from its woes.”

Segment-wise PE Inflows

Commercial real estate maintained its numero uno position, attracting USD 3.3 bn of PE funds in 2019 as against USD 3.8 bn in 2018
The retail sector was a major draw for PE funds in 2019, receiving total PE inflows of USD 970 mn in as against USD 355 mn in 2018 – an annual rise of over 170%
The residential sector received PE inflows of USD 395 mn in 2019 against USD 265 mn in 2018.
The high potential of logistics and warehousing notwithstanding, this segment attracted about USD 200 mn PE funds - a drop of nearly 50% against the previous year.
Mixed-use developments saw inflows of approx. USD 155 mn in 2019, as against USD 310 mn in 2018