Shrinivas Rao, CEO-APAC, Vestian, highlights key takeaways for India’s real estate sector
The real estate sector, a key component of the country’s growth story, attracted announced investments worth USD 7.2 billion across 65 transactions in the past year.
Foreign funds led the way, with majority of the total PE investments secured by the commercial sector.
Notifications of REITs regulations and relaxation in, FDI norms have led several foreign investors to acquire Grade-A commercial properties that are mostly ready to occupy and are rent yielding.
Compared with previous years, increasing PE participation in the residential sector was observed in 2018, primarily owing to government’s thrust on 'Housing for All' initiative with various incentives for the developer.
Investment in industrial assets - mainly comprising warehousing and logistics sector, has observed considerable interest in 2018 as well. Factors such as GST, ‘Make in India’ initiative and the growth of e-commerce have led to rising interest in the sector.
The southern region of the country accounted for the largest quantum of investment, accounting for 47 per cent share of the total PE investment pie during 2018, recording the maximum number of PE deals.
The highest PE investment, value-wise as well as in number was recorded in Mumbai, while the average investment size was the largest in Bengaluru.
The new year 2019 started on a positive note, with approximately USD 320 million of PE investments in various asset classes recorded till mid-March across the country.
Meanwhile, the launch of India's first REIT, backed by private equity giant Blackstone Group LP and Bengaluru-based developer Embassy Property Developments, has come as a positive move for the cash-strapped Indian real estate sector. The bullish sentiment shown by the institutional and retail investors regarding its subscription is expected to help further build global PE investor confidence in India.