Indian real estate attracts $5 billion PE in 2019

Indian commercial real estate retained its Numero Uno position and continued be a preferred destination for global institutional investors in the backdrop of robust office space take-up, falling vacancy levels and rising rentals. Indian real estate attracted more than $5 billion private equity (PE) inflows in 2019. Of this, over 66% or $3.3 billion was infused in the commercial real estate. Meanwhile, both retail and residential segments saw an uptick in investments in 2019 against the preceding year, showed data from ANAROCK Property Consultants. While the Mumbai Metropolitan Region (MMR) remained the most attractive investment destination for PE funds, it was the National Capital Region (NCR) that stood out in 2019. After Mumbai, the national capital region was the second-most attractive real estate destination for PE players. Together, the two mega regions received PE inflows of $2.7 billion - a 53% overall PE share - in Indian real estate in 2019. “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,” said Shobhit Agarwal, MD & CEO – ANAROCK Capital. “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 housing projects. This, along with the government support of Rs 25,000 crore for stressed projects, will go a long way in relieving residential real estate from its woes.