PE investment in real estate up 19 pc to Rs 39,182 cr

Private equity investment in the real estate sector rose 19 per cent to Rs 39,182 crore during the first nine months of this calendar year as foreign investors continued to acquire commercial complexes, property consultant Cushman & Wakefield said.

Private equity (PE) investment in the corresponding year-ago period stood at Rs 32,890 crore.

"A 19 per cent upswing in investment activity on a year-on-year basis shows a positive outlook for the industry," said Anshul Jain, Country Head and Managing Director-India, Cushman & Wakefield (C&W).

Among asset classes within the real estate sector, Cushman data showed that office properties witnessed PE investment of Rs 20,757 crore during January-September 2019, up 18 per cent from Rs 17,535 crore in the corresponding period of the previous year.

In line with expectations, residential segment saw a drop of 24 per cent to Rs 6,255 crore from Rs 8,280 during the period under review.

PE investment in the retail real estate jumped over two-fold at Rs 4,800 crore from Rs 1,988 crore, while that in hospitality segment almost doubled to Rs 3,950 crore from Rs 2,025 crore.

Industrial (warehousing and logistics) segment garnered Rs 1,971 crore, up 91 per cent from Rs 1,030 crore in the year-ago period.

The PE investment in other categories like mixed-use properties and entity fell 29 per cent to Rs 1,450 crore during January-September 2019 from Rs 2,032 crore in the same period last year.

"We expect fund commitments across multiple platforms and asset classes, that were set up over the last three to four years, to be now deployed. The focus for these funds remains office, retail and warehousing/logistics segments," Jain said.

Fresh Real Estate Investment Trust (REIT) listings should further add depth to the market and attract more investments, particularly in the office sector, he added.

The consultant mentioned that office segment continued to be the favoured investment asset class, and would witness further traction in the near term.

Institutional interest in rent-yielding office assets continues to be backed by strong occupier demand with 2019 slated to surpass 2018’s leasing numbers for a new historic peak.

The successful REIT listing of Embassy-Blackstone platform with the scrip performing well post the listing bodes well for new REIT listings, it added.

Among major transactions during July-September quarter, Blackstone Group agreed to buy the remaining 50 per cent stake in the office assets of Indiabulls Real Estate in Mumbai and Delhi-NCR having bought a 50 per cent stake earlier in 2018.

Virtuous Retail (the Xander-APG retail platform) announced an investment of Rs 2,400 crore for acquisition of a land parcel in Thane, Mumbai for development of a retail project as part of a greenfield mixed-use project.

Xander Investment Management acquired Weikfield IT Info Park in Pune from New Vernon Capital, the report said.