PE inflows in residential at 4-year low, commercial at 4-year high
- Total private equity inflows in residential at US$ 266 mn in 2018 – an 82 per cent decline since 2015
- Commercial real estate drew the lion’s share with US$ 2.8 bn PE funds
- Average deal size increased by over 170 per cent in 4 years – from US$ 47 mn in 2015 to US$ 128 mn in 2018
- Overall real estate sector attracted over US$ 4 bn of PE funds in 2018; a decline of 9 per cent against 2017
- In less than 3 months into 2019, PE investment into real estate are close to US$ 1 bn
Top 5 PE Deals of 2018
Shapoorji Pallonji Group
Mapletree Investments Pte Ltd.
Indiabulls Real Estate
Equinox Business Park
Amt (US$ Mn)
Hotel Leela Ventures
Logistics & Warehousing
- Between 2016 and 2017, the main Southern cities cumulatively saw just 18 per cent (in 2016) and 17 per cent (in 2017) of the total PE investments. This share increased to 54 per cent in 2018 through a series of investments.
- The retail real estate sector is riding high on India's growing consumerism - not just in metros and tier 1 cities but also in Tier-II and Tier-III cities. Nearly 46 per cent of institutional investments in retail spaces between 2015 and 2018 were made in non-metro cities like Bhubaneshwar, Chandigarh, Indore, Amritsar and Ahmedabad.
- Due to multiple issues like stalled or delayed projects, the liquidity crunch, high property values andlow sales, the residential real estate sector has been shedding PE investors' interest. Between 2015 and 2018, equity investments into the sector reduced from 47 per cent to a mere 3 per cent.
- However, the affordable housing segment is gaining momentum and investors will seek to secure a slice of this increasingly lucrative pie.
- At the city-level, Mumbai continued to be the most-preferred destination for overall PE investments, seeing nearly 38 per cent of the total capital inflows in 2018
- Hyderabad witnessed a sudden burst in investments in 2018, attracting more than US$ 1.1 bn of private equity - a more than three-fold increase in investments compared to the collective previous three-year period. This growth spurt was largely led by commercial real estate, with the Phoenix Group receiving vast PE infusions through multiple deals.
- Hyderabad surpassed Bangalore and Chennai, the other two major South Indian cities, in investment inflows.
Read the full report here: https://api.anarock.com/uploads/research/Private-Equity-in-Indian-Real-Estate-ANAROCK-Capital.pdf