PE investments in real estate decline by 44% to $3.0 bn in 2023: Knight Frank India
India’s real estate market received private equity (PE) investments of USD 3.0 billion from 23 deals in 2023 (January 01 – December12, 2023), as against USD 5.3 bn recorded in 2022, according to Knight Frank India.
The distribution of PE investments during the year 2023 saw the office taking the lead with 58%, followed by warehousing at 23%, and residential properties at 19%. The retail sector did not witness any PE deal in 2023. Mumbai (USD 1,685 mn/1.6 bn), the National Capital Region (USD 835 mn) and Bengaluru (USD 347 mn) received the largest proportion of investments across sectors in 2023.
Global geopolitical uncertainties and high interest rate environment with multiple rate hikes from the US Federal Reserve and Central Bank of Canada have curbed investment activities from the US and Canada, leading to significant reduction of 44% year-on-year (YoY) from USD 5.3 bn recorded in 2022. However, PE investments from Singapore towards Indian real estate has significantly moved up from 31% in 2022 to 53% in 2023.
Commenting on the same, Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “The office segment in India continued to attract investors’ preference owing to the resilience shown by high-quality assets, while the warehousing sector maintained its position as a growing favourite among investors. Foreign investors remained the primary contributors to investments in 2023, followed by domestic investment firms.”
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“We have also witnessed that there has been a rise in interest from Asian private equity (PE) players in the recent past. This increased attention from Asians, particularly amid the impact on investments from western
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