India Steel Market Watch
November 18: Private Equity (PE) players are now raising funds for specific real estate asset classes like residential, unlike the earlier modus operandi of raising diversified funds, as per a report ‘Real Estate Private Equity 3.0’, prepared by JLL India, a real estate consultancy.
According to the report, in 2007-08, around 66% funds were diversified whereas after 2014, residential-focused funds have increased to 85% from the then figure of 14%.
Anuj Puri, Chairman & Country Head, JLL India, said, “There has been a clear increase of focus among investors about where they want to invest their funds. These trends show that the investment approach of investors has changed from weighing every asset class on the opportunity it presented to becoming residential-focused, as this asset class has given maximum returns over the years.”
From 2014, Indian real estate has witnessed PE investments worth $2.2 billion till now. When we compare the quantum of activities in the last 18 months to investments between 2009 and 2013 that were worth $3.9 billion, this uptick is clearly evident. Per year investment has increased by two times.
It is largely the developers with very good track record that have managed to attract investments. At the same time, investors have restricted themselves to seven-eight cities only and a considerable portion of investment has gone into residential and office assets, showcasing a clear focus among the investors.