PE inflow in Indian realty jumps two fold in H1 of 2021: Colliers

New Delhi: Total private equity (PE) inflow in Indian realty jumped more than two fold in first half of the current year as compared to the same period of 2020. The PE inflow touched USD 2.9 billion in the first half of 2021, according to a report by  Colliers India. 

Colliers expects PE inflows in the Indian realty market to touch USD 5 billion in 2021, a 4.1 percent jump from the levels seen in 2020. The foreign investors continued to be optimistic about the Indian market. They snapped up assets in office as well as industrial space. Office space assets accounted for as much as 35 percent of the total investments in the first half of 2021. This was followed by industrial assets which accounted for 27 percent. Foreign investors are assessing the current Indian scenario for opportunities to buy properties at great valuations.

“The confidence of investors to invest in Indian real estate has strengthened in the past few months. The investment trends reflect an interest in broader classes of assets and structures. Deal types include, forward purchase of office assets, formation of platforms and acquisitions with development risks in office assets, opportunistic acquisitions of retail assets, industrial assets including warehousing and data centers, large credit transactions for portfolio acquisitions, and development financing. These reflect the scale, long-term stability, and sustainability that the Indian market is perceived to provide”, said Piyush Gupta, MD- Capital Markets & Investment Services (India), Colliers.

Investments in the under construction office spaces has gained momentum. The foreign investors are continuing look for land or assets at under construction stages as they are looking to build up their portfolios for future REIT listings. 

There is limited availability of quality rent yielding assets at proper valuations, as most of the large real estate firms have formed partnerships with institutional investors. In the first half of 2021, around 86 percent of the overall investments in the office spaces were in land or in under construction projects.