Equity investment in real estate sector sees 19% rise at $3.8 bn in Jan to Sep 2019 period

Equity funds have pumped in nearly 3.8 bn dollars between January to September period in 2019 into the Indian real estate market, an almost 19 percent yearly increase, according to a report by ANAROCK Property Consultants.

Total private equity inflows equalled over $3.2 billion in the corresponding period a year ago.

As much as 3.6 bn dollars was equity funding – comprising nearly 95 percent overall share – while the remaining 5 percent was via structured debt. Also, foreign private equity funds continued to dominate the real estate investment scene. Top investors included Blackstone, Hines, Ascendas and Brookefield, the report said.

Commercial real estate continued to attract maximum PE investments, totalling close to $3 billion funds in the first three quarters of 2019. In the corresponding period of 2018, total inflows within this segment equalled nearly $2.1 bn dollar, thus rising by 43 percent in a year.

Residential segment, on the other hand, received  $295 million funding this year as against $210 million last year, thus seeing nearly 40 percent yearly gain, the research said.

Retail segment attracted close to $260 million since January till September 2019 whereas last year it saw inflows of $355 million, a reduction of 27 percent in a year.

Logistics and warehousing witnessed 27 percent decline in total PE inflows in 2019 and equalled nearly 200 mn dollars as against $275 million a year ago.

MMR attracted maximum PE funding in 2019, amounting to approximately $1.59 billion. On yearly basis, the region saw total inflows increase by 3 percent from $1.54 billion in first three quarters of 2018.

Pune, on the other hand, saw total investments of $390 million between January till September period in 2019 against $125 million in same period of 2018, a rise of nearly 213 percent.

The IT capital of India – Bengaluru – also witnessed nearly 17 percent yearly gain – from $420 million in 2018 period to nearly $490 million in 2019.

PE funding in NCR continued to squeeze further in 2019 with investors pumping in merely $115 million in contrast to $150 million in January to September period of 2018.

Top 3 deals in Q3 2019
Investor Investee Location Asset Class Approx. Deal Amount (USD Mn.)
Blackstone Indiabulls Real Estate Mumbai Commercial 850
Blackstone & Salarpuria Sattva Tanglin Retail Realty Bengaluru Commercial 400
Xander New Vernon Capital Pune Commercial 150

Source: ANAROCK Capital

(Note: Deals rounded off to nearest 50)