Real Estate Witnessed $4,068 Million Private Equity Investment In 2020

Private Equity Investments: The country attracted private equity investments of around $ 38,149 million in the year 2020. Out of the total PE investment, the real estate sector claimed an 11 per cent share in 2020 with $ 4,068 million, closing 21 deals during the year, according to leading property consultant Knight Frank India. The share of the office and warehousing private equity investments have surged over the last decade from 24 per cent in 2011 to 62 per cent in 2020 and six per cent to 24 per cent during the same period respectively. (Also Read: Budget 2021: Upfront Amount of CLSS Subsidy Must be Raised To ₹ 3.5 Lakhs )

“Despite a slowdown in overall PE investment, we continue to witness a strong investor appetite for rent yielding office assets. Knight Frank believes that with more clarity on the pandemic resolution and sense on structural changes, the deal activity is expected to pick up further in 2021,'' said Shishir Baijal, Chairman and Managing Director, Knight Frank India

According to Knight Frank, since the year 2011, the segment has garnered $16,213 mn of equity investments, and during 2020, the segment transacted seven deals amounting to USD 2,509 million. Around 21.8 mn sq ft of the office assets were transacted in 2020. The private equity investments through equity route in this space were down 19 per cent year-on-year in 2020 as compared to $ 3,096 mn during the same period last year. In a period of 10 years, i.e., January 2011 - December 2020, Mumbai took the biggest leap of office investment worth $ 5,288 mn followed by the National Capital Region (NCR) with  $ 2,803 mn and Hyderabad with $ 2,160 mn.

The residential sector registered seven deals worth $ 368 million in 2020, which were down 49 per cent year-on-year as compared to $ 717 million in the year 2019. Residential prices have been constant for many years and have even corrected at few locations. Though the overall private equity investment (debt and equity) in the residential sector has come down in the past four years, the investors' risk appetite in the residential sector has gone up as the share of equity investments has grown from 35 per cent in 2019 to 52 per cent in 2020.