PE investments in real estate robust despite sector slowdown

Cushman and Wakefield report says private equity investments in real estate rise 7% to Rs.6,200 crore in 2012
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First Published: Wed, Mar 13 2013. 12 59 PM IST
Bangalore saw the highest number and value of private equity investments at Rs3,250 crore in 2012 followed by Mumbai with Rs1,300 crore and the national capital region with Rs700 crore. Photo: Ramesh Pathania/Mint
Bangalore saw the highest number and value of private equity investments at Rs3,250 crore in 2012 followed by Mumbai with Rs1,300 crore and the national capital region with Rs700 crore. Photo: Ramesh Pathania/Mint
Updated: Wed, Mar 13 2013. 07 08 PM IST
Mumbai: The total value of private equity investments in real estate rose 7% in 2012 to Rs.6,200 crore, according to the latest Real Estate Investment Market Report from consultant Cushman and Wakefield, amid a slowdown in the sector.
In terms of value, most of the investments were in ready income generating and operational office assets, up 34% to Rs.3,230 crore, according to the report.
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“Investment in ready income generating/operational office assets have gained strength over the last few years due to lower risk and steady cash flows associated with this type of investment. With an increase in the number of high-value transactions in this sector, the market is moving towards a mature phase,” said Sanjay Dutt, executive managing director (South Asia), Cushman and Wakefield.
The residential segment, on the other hand, witnessed private equity investments at Rs.2,850 crore in 2012. The average ticket size of investments in the segment in 2012 was Rs.114 crore, rising 4% on average over 2011. Bangalore saw the highest number and value of private equity investments at Rs.3,250 crore in 2012 followed by Mumbai with Rs.1,300 crore and the national capital region with Rs.700 crore.
“In India, we get the best deals as the capital is less and there are so many good opportunities,” said Amit Bhagat, chief executive and managing director of ASK Property Investment Advisors Pvt. Ltd. The company is raising its first offshore fund of around $250 million registered in Singapore.
“We are planning to invest Rs.1,000 odd crore of private equity in real estate for the financial year 2013-14 and the typical investment size will be Rs.100-150 crore,” said Bhagat.
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First Published: Wed, Mar 13 2013. 12 59 PM IST
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