Foreign PEs dominate

Giving a flicker of hope to cash-starved Indian real estate, private equity funds have pumped in nearly US$3.8 billion between January to September period in 2019, up 19% on US$3.2 billion in the corresponding period a year ago.

As much as US$3.6 billion was equity funding – comprising nearly 95% overall share – while the remaining 5% was via structured debt, writes Shobhit Agarwal, MD & CEO – ANAROCK Capital.

Also, foreign private equity funds continued to dominate the real estate investment scene, according to ANAROCK Research. Top investors included Blackstone, Hines, Ascendas, Brookefield etc.

Commercial real estate continued to attract maximum PE investments, totalling close to US$3 billion funds in the first three quarters of 2019. In the corresponding period of 2018, total inflows within this segment equalled nearly US$2.1 billion, thus rising by 43% in a year.

Residential segment, on the other hand, received US$295 million funding this year as against US$210 million last year, a yearly gain of nearly 40%.

Retail segment attracted close to US$260 million funds since January till September 2019 whereas last year it saw inflows of US$355 million, down 27% in a year.

Logistics & warehousing witnessed 27% decline in total PE inflows in 2019 and equalled nearly US$200 million as against US$275 million a year ago.

Cities on a roll

MMR attracted maximum PE funding in 2019, amounting to approx. US$1.59 billion. On yearly basis, the region saw total inflows increase by 3% from US$1.54 billion in first three quarters of 2018.

Pune, on the other hand, saw total investments of US$390 million between January till September period in 2019 against US$125 million in same period of 2018, a rise of nearly 213%.

Bangalore, the IT capital of India, also witnessed nearly 17% yearly gain from US$420 million in 2018 period to nearly US$490 million in 2019.

Interestingly, Hyderabad, which saw more than US$790 million PE inflows in the first three quarters of 2018 saw overall PE funding decline by 76% to US$190 million in 2019. In entire 2018, the city attracted total funds worth US$1.1 billion – more of a one-hit wonder.

Chennai saw investments of nearly US$230 million into real estate sector in 2019 against US$160 million a year ago, an increase of approximately 44%.

PE funding in NCR continued to squeeze further in 2019 with investors pumping in merely US$115 million in contrast to US$150 million in January to September period of 2018. fiinews.com