Thursday, 9 August 2018

All About Private Equity Investments In Real Estate

Private equity (PE) investments in real estate have grown at a CAGR of 36% since 2014 at Rs. 59,100 crores in 2017. It is bolstered by a reduction in the investment risk perception and availability of mature assets. Government scheme of ‘Housing for All’ holds promising opportunities for Private equity investors as they can look for projects that show best prospects.  

Residential properties have endured the most preferred property class as over 3.1 billion of total private equity investment was notified during the year in the assets class. In this sector, Mumbai is the most preferred location for living and accounts for 34% share followed by Bangalore and Delhi NCR which each account for 20% and 26% of the share, respectively. While, domestic money was not active realty investors in Residential properties in Mumbai, Delhi, Bangalore etc and accounts for 80% of total investments.

The real estate has seen a resurgence of interest in 2017 after slowdown of the previous 2-3 years, buoyed by affordable housing segment which includes residential units less than Rs. 50 lakhs.

Keeping in mind the real estate market of cities like Mumbai and Bangalore experts believe the private equity will boom and in coming days witness its glorious days, though it is now being marked by constant ups and downs.

At times, when the private equity market go up / down, investment in residential sector grows weak, investors flock to commercial assets with the inflow into office segment growing steadily and warehouse. Experts feel that these otherwise neglected segments of retail and warehousing are witnessing renewed interest and will grow steadily.


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