PE Investment in real estate in Q1 2015 almost doubles YoY

Q: The residential sector attracted the highest transaction volumes during the Q1,2015.

Joydeep D,

6th August 2015

Real estate News in Mumbai

real estate investment

pe funds

cushman and wakefield

private equity investments

investment in residential sector

Follow Discussion

Also see discussions for

Mumbai Real estate News Real estate News in Mumbai

Replies (3)

In spite of that, there is huge scope for the funds to generate high yet stable rental incomes. But it seems to me that the private equity funds are likely to take only calculated risks and work together with famous developers to protect their investments.

Chandramohan, Bangalore

6th August 2015

Comment

They are strictly because the total number of deals fell to 16 in Q1 2015, compared to 18 in the same quarter a year ago. However, the average deal size more than doubled and was noted at Rs. 3.2 bn, compared to Rs. 1.5 bn in Q1 2014.

Amreesh Murugan,

6th August 2015

Though, Chennai recorded the highest level of transaction volume in Q1 2015 with investments of Rs. 2881 crores nearly six times the investments in 2014. Investments in Chennai were primarily in residential assets ie 84% and remaining 16% were in commercial office assets.

Chandramohan, Bangalore

6th August 2015

Yes, in Q1 2015, residential assets recorded the 2nd highest PE investment since 2008. The total value of investments in the residential sector was 2.5 times more than Q1 2014 and was recorded at Rs 2752 crores. Relatively attractive return on investments and easy exits, increased focus on housing from the Narendra Modi-led BJP government and high funding needs are likely to sustain the high investments in residential assets.

Gurmeet,

6th August 2015

Comment

But the liquidity matter faced by residential developers due to muted demand and cramped access to debt funding, PE funds have come forward as an important alternate source to meet the funding requirements. They continue to make investments in the residential sector at the project level rather than at the entity level to protect their investments.

Arpit, Delhi-NCR

6th August 2015

As per the report, PE Fund are probable to increase their investments in the next few years. Residential and leased office assets will remain as favorites with PE funds as demand for funding remains strong in the residential projects and given the 35% y-o-y increase in office net absorption.

Amreesh Murugan,

6th August 2015

True.......Joydeep,
As per latest report by Cushman & Wakefield, Private Equity investments in Real Estate revealed that total inflows in the sector for Q1 2015 were Rs.5168 crores, higher by 85% from the same qtr a year ago Rs.2800 crores. However, it was marginally lower by 5.6% compared to the previous qtr. The residential sector attracted the highest transaction volumes during the quarter with a 53% share in total investment activity, followed by the commercial office sector, which had a 47% share.

Gurmeet,

6th August 2015

Comment

But the increase in PE investments during Q1 2015 was due to improved market sentiments and higher investments in residential and commercial office assets, which increased by 158% and 68% respectively compared to Q1 2014. Although Chennai was the only city, which witnessed investment in commercial office in Q1 2015,

Amreesh Murugan,

6th August 2015