Private equity funds returning to realty space in India again

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SummaryThe real estate sector isexpected to witness a revival this year.

Optimistic about the revival ofeconomy after Lok Sabha elections, foreign and domesticprivate equity players are now returning to Indian real estatesector, but with caution and will focus on top six-sevencities, say industry experts.

Last year witnessed as many as 393 PE deals totallingUSD 9.67 billion, out of which USD 40 million were in the realestate sector.

"We believe the current sentiment cannot become worsethan (in the) last few years. The real estate sector isexpected to witness a revival this year. This positivesentiment is encouraging private equity players to re-look atthe sector for investment," PwC executive director ShashankJain told PTI.

Both the domestic as well as international players arelooking at investing in the sector, he added.

In January, ASK Group raised its first tranche of USD 50million of USD 200 million off-shore funds to invest inmid-income residential projects. Brick Eagle Group is raisingUSD 100 million to invest in lands for affordable housingdevelopment.

Indiareit Fund Advisors has finished raising USD 160.5million to buy property assets in the major metros. IPAL hasbegun the process to raise USD 250-300 million through anoffshore fund, and Rs 300 crore through a domestic fund to

invest in redevelopment projects in the megapolis.Qatar Investment Authority is in talks to invest USD200 million in some residential property in the country, whileMilestone Capital Advisors is also in the process of raisingRs 500-crore real estate fund, which is likely to be launchedin the next few months, according to industry sources.

"Improvement in policy framework, banking sector reforms,and increase in construction activities are encouraginginvestors to look at real estate. There have been investmentsin real estate asset class, which are giving double digitreturns of around 20-22 per cent," Milestone Capital directorRubi Arya said.

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