Private equity investments in Indian real estate surge 13% in 2013: Cushman and Wakefield report

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SummaryOverall private equity investments across sectors in India have also increased by 11% from $9.49 billion in 2012 to $10.5 billion in 2013.

Private equity (PE) investments in Indian real estate have increased 13% in 2013 with the total inflows during the year at Rs 7,000 crore ($1.2 billion), compared to Rs 6,200 crore in 2012 ($1.1 billion), says global realty consultants, Cushman and Wakefield.

Overall private equity investments across sectors in India have also increased by 11% from $9.49 billion in 2012 to $10.5 billion in 2013. The increase in private equity inflows was primarily due to rising investments in residential assets and other sectors like retail and hospitality.

While the number of deals has increased to 40 in 2013 compared to 34 in 2012, the average deal size has declined marginally and was approximately Rs 175 crore ($28 million), Cushman said.

The total foreign direct investment (FDI) inflow in construction development for the third quarter of 2013 was noted at Rs 3,200 crore ($520 million), which is the highest quarterly investment since third quarter of 2009. FDI inflow for the first three quarters of 2013 in construction development was Rs 5,500 crore ($900 million), a 25% increase from the same period in 2012. Contribution to overall FDI by the construction development sector was comparatively higher at 9% in Q3 2013 compared to 3-4% in the first two quarters.

“A number of large global investors, including a number of sovereign funds, have taken the first move by partnering with successful local investors and developers for investing in the Indian real estate market. This is expected to result in high transaction activity especially in income yielding commercial office assets during 2014,” says Sanjay Dutt, executive managing director (South Asia), Cushman & Wakefield.

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