Private equity (PE) investment inflows into the Indian real estate sector stood at USD1.9 billion (about Rs 13,500 crore) in the first quarter of 2021, according to property consulting firm Savills India.
In Q1 2020, PE investment into the sector was at USD 0.65 billion, it said in a report titled 'India Investment Market Watch. Q1 2021 clocked in about nearly a third of the investment inflows that the sector witnessed in the entire year 2020.
Savills said that despite the remote-working culture, commercial office assets remained the frontrunner, garnering more than half (58 per cent) share of the investment pie.
All the quarterly investment came from foreign institutional investors and was mostly concentrated in the two southern cities of Bengaluru and Hyderabad.
Strengthening residential sales in the middle income and affordable segments is evoking more interest from offshore investors and will materialise in commitments to this sector in the coming times, said Savills.
The increased demand for warehousing facilities, especially from e-commerce and third-party logistics players, has steered private equity institutional investments into the sector.
During Q1 2020, investors such as Blackstone and Ascendas Firstspace formed platforms to develop and invest to the tune of USD730 million (Rs 5,300 crore) in industrial facilities in the cities of Pune, Bengaluru, Hyderabad and Chennai.
"The noticeable recovery in the real estate and the increased momentum of investment inflow into the sector is a clear sign of investors' regaining confidence post the slowdown induced by the pandemic last year," said Diwakar Rana, Managing Director for capital markets division of Savills India.
The Q1 of 2021 has registered some marque deals and volume as well as the velocity of similar transactions is likely to continue for the coming quarters, he said.
"The strong drive for commercial real estate in cities like Bengaluru and Hyderabad along with increased demand for residential are likely to play pivotal role in attracting more PE funds going forward," said Rana.