Private Equity funds invest $2.4 billion in 53 real estate deals in 2015

Q: Deal sizes have increased in 2015, and residential projects, luxury and affordable, attracted a sufficient amount of capital.

Mahendra, Mumbai

1st October 2015

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top 5 real estate deals in 2015

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Replies (4)

Today, this sector needs equity because the developer is under constant pressure to service loans and many are highly leveraged. Even if foreign institutional investors largely believe equity is the need of the hour, domestic fund managers have stuck to debt-lending.

Indranil, Gurgaon

3rd October 2015

Comment

The only reason is that money that is being raised by realty firms is mainly used to refinance existing loans. As a result, cash flows remain weak on the back of slow sales. With developers who are holding back fresh project launches, they also need capital for project execution to speed up delivery of homes.

Chiraj Malik, Bangalore

2nd October 2015

Comment

Here are the top 5 private equity real estate deal in 2015:- 1) GIC Pte Ltd joined hands with DLF Home Developers Ltd. in September,2015 in residential project in Delhi with a CAPITAL OF $ 299.53.

2) In August 2015, Asian Development Bank, International Finance Corp., SCM Real Estate Singapore Pvt. Ltd. joined hands for investment in affordable housing projects with Shapoorji Pallonji Group with a capital of $ 200.

3) Again in August, Goldman Sachs Group Inc. joined hand with Piramal Realty Ltd. for entity level investment with a capital of $ 136.8.

4) In July 2015, Piramal Realy Limited sign a deal for entity level investment with Warburg Pincus for $ 284.34.

5) Faery Estates Pvt. Ltd. sign a deal with SPREP Pte Ltd, alliance between Canada Pension Plan Investment Board and Shapoorji Pallonji Group for $ 220.

Shrikant Kejriwal, Mumbai

1st October 2015

Comment

@Shrikant,
GIC is very confident of India's long-term growth potential. According to them the fund hopes to support mutual strengths to grow the partnership and collaborate on more projects in the future.

Ayesha Bibi, Kochi

1st October 2015

Investment by FIIs and PE Fund have increased because asset prices and valuations have become more reasonable, entry barriers are lower and the larger regulatory framework appears more favorable for global institutional players to enter into business connections in India.

Shrikant Kejriwal, Mumbai

1st October 2015

Right Shrikant....
And different from the 2008 slowdown, there seems to be no scarcity of capital in the sector today, though most of the capital available from domestic funds is structured debt, as fund managers remain cautious of taking equity risks.

Ayesha, Delhi-NCR

1st October 2015

Right Sir,
But this figure is higher than $ 2.1 billion in 80 deals invested in 2014, in the middle of a 2 years long slowdown that continues to see muted sales and an inventory pile-up. But the current picture has been changing and Foreign institutional investors and the private equity funds made a queue to invest in residential and commercial projects in 2015.

Shrikant Kejriwal, Mumbai

1st October 2015

Comment

Yes, and it is heard that the Government of Singapore Investment Corp. Pte Ltd (GIC), a sovereign wealth fund fairly active in the real estate sector in recent months and it will invest about Rs.1990 crore in 2 upcoming residential projects of DLF Home Developers Ltd. through a joint venture.

Amit Raj, Delhi-NCR

1st October 2015