PE Investment in Indian Realty recorded at $1.92 bn in Q2, up 60%
Indian Real Estate Sector recorded robust private equity investment of $1.92 bn in Q2 2023, highlighting investor confidence in the market after a marginally subdued Q1. This is 63% higher than the previous quarter (Q1-23) and 60% higher than the same period last year, according to Cushman & Wakefield’s latest Investment report.
The office segment, which had seen its share come down over the last two quarters, re-emerged as the most preferred asset class in Q2 by capturing almost 65% of the total quarterly PE flows, largely driven by operational asset acquisitions across Delhi NCR, Mumbai, and Hyderabad. Somy Thomas, Managing Director, Valuations and Co Head, Capital Markets, Cushman & Wakefield said, “Indian office markets are one of the most resilient investment classes in the real estate world with stable occupancies along with rental growth beating inflation.
Retail asset classes are doing mostly double-digit NOI growth on a YOY basis and considering the shortage of high-quality retail space, we expect rental growth to continue in the near term.” As per the findings of the report, foreign investors accounted for nearly 84% of the investment inflows driven by Singapore, Canada, and USA-based institutions. Fund-raising activity, however, was limited in Q2 with the quarter witnessing a total of $304 Mn in fundraising focused on the residential and L&I segment.
This is expected to pick up in H2, 2023, largely driven by two major institutional players planning to focus on existing commercial asset portfolio expansion in the next few years. The Q2 also saw the listing of India’s maiden retail REIT ‘Nexus Select Trust’ which raised close to $390 Mn from its share sale in May 2023.
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