New Delhi: Private equity investment in the Indian real estate continues to rise and there are many strategic investments taking place, notes a recent study by property consultant Cushman & Wakefield. There are some clear trends in the private equity investments. These are:
1 Joint venture alliances between development partners and investors is going up in popularity: PE fund – developer partnerships are increasing with a growth of 27 percent in first half (H1) of 2019 in such investments that clocked Rs 7,434 crore mark.
2 Redevelopments, Greenfield projects are getting popular with investors: Most of the core and core-plus office properties have been invested in or acquired by institutional investors. As a result, investors are focussing at greenfield developments through land acquisitions or eyeing old buildings with an aim of redevelopment.
3 Investors are aiming at alternative residential properties: As investors are treading carefully on investments in the mainstream residential segment, the new and emerging segments like co-living and student housing are gaining traction. These new segments are seeing creation of platforms with a long-term bet on alternatives.
4 Platforms are being created in various asset classes: Signalling fairly long-term commitment of foreign institutional investors in the real estate sector, many platforms continue to be formed. The second quarter of 2019 saw formation of three major platforms in hospitality, retail and industrial sectors. Singapore’s GIC and Indian Hotels Corp Limited formed an INR 40 bn platform for acquisition of operational upscale hotel assets. Warburg Pincus and Runwal Group created a USD 1 bn platform targeting investment and development of retail assets across India while Puravankara Ltd and Morgan Stanley formed a warehousing platform targeted at developing industrial parks in South India.