PE funds pump $9.7 b into real estate

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Private equity (PE) funds have pumped nearly $9.7 billion into Indian real estate sector between the first quarter of 2017 and the first quarter of 2019, of which southern cities account for the maximum interest from investors.

The Southern cities of Bengaluru, Chennai and Hyderabad garnered paramount attention by investors, followed by Mumbai and Pune, according to Anarock Capital.

Logistics and warehousing saw an investment of $1.1 billion during the period.

The logistics sector had a massive jump-start in the first quarter of 2019 when private equity players pumped in nearly $200 million into the southern cities, Shobhit Agarwal, MD&CEO, Anarock Capital said.

“Infrastructure status, the multi-modal logistics park policy and implementation of GST has caused private equity firms to take greater interest in logistics and warehousing sector,” he said in a research note.

The otherwise usual favourite of PE funds - residential real estate - saw equal inflows of $1.1 billion during the same period. Commercial real estate saw nearly $5.7 billion of PE funding in the two-year period.

Among the major deals, IndoSpace - India’s leading developer of industrial real estate and warehousing facilities – saw maximum inflow in 2017 to the tune of $500 mn from Canada-based CPPIB for projects across cities like Bengaluru, Chennai, Pune, Mumbai and Delhi.

Among the top deals in 2018, Warburg Pincus invested nearly $180 million in Embassy Group for a project in Bengaluru and Proprium Capital Partners invested nearly $100 million into Musaddilal Projects in Hyderabad.

Among the top deals in 2019, LOGOS India invested nearly $100 million into Casagrand Distripark in Chennai, while Embassy Industrial Parks invested nearly $50 million in DRA Projects in Bengaluru.

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