The total investments into the real estate sector by private equity players have zoomed to Rs 11,080 crore in the first half of calendar year 2015 as against Rs 4,000 crore in the same period last year. PE investments in the sector has also witnessed the highest inflows during the January-June period since 2008, owing to increased exposure from both domestic and foreign funds.
The residential sector continued to attract the majority share of total investments during H1, 2015, with 56% share, which remained steady on year-on-year basis, followed by the commercial office space, which had a 41% share. The remaining was in mixed use developments.
As per global real estate consultancy Cushman & Wakefield’s latest report on Private Equity investments in Real Estate (PERE), Chennai recorded the highest level of transaction volume during H1, 2015 with total investments of Rs 3,778 crore, which surged many folds compared to the investments in H1, 2014. The total PE investment volume in Chennai in H1, 2014 was just Rs 200 crore.
Chennai is followed by Mumbai with the second highest share with an investment volume of Rs 3,266 crore. Mumbai had witnessed investment levels of Rs 1,140 crore in H1, 2014.
The top deal was noted in Chennai, wherein US- based New Vernon Capital invested Rs 2,400 crore in SP Infocity IT Park. The second largest deal was also in commercial office asset, wherein US-based Blackstone invested Rs 1,060 crore to buy 247 Park in IT corridor of Vikhroli in Mumbai.
Bengaluru accounted for the third highest share with Rs 1,954 crore of investments. In H1 of 2014, Bengaluru had witnessed the highest level of transaction activity with investments of Rs 2,005 crore. Equis Funds Group and Piramal Fund emerged as the leading investors in Bengaluru, making investments in excess of $ 100 million (Rs 660 crore) each in residential assets.
Sanjay Dutt, executive managing director South Asia, Cushman & Wakefield, said, “The investment trend is likely to continue upwards owing to improved macro-economic factors.”