PE investment in realty up 26% in Jan-Sep period: Cushman and Wakefield

Mumbai: Private equity investment in real estate increased 26% in the January-September period over the same period last year despite the sector’s overall slow growth, according to a report released on Thursday by real estate consultancy Cushman and Wakefield.

The total value of announced private equity transactions in real estate for the first three quarters of 2013 was ₹ 4,716 crore compared with ₹ 3,750 crore in the year-ago period.

At the same time, net absorption in offices is down by 15% and vacancies are increasing.

Of the overall investment during the year, ₹ 3,078 crore, or approximately 65%, came in the third quarter.

“Despite a slowdown in the local real estate market, funds remain committed to India as a top investment destination with overall private equity investment only expected to increase especially in income yielding assets,” Sanjay Dutt, executive managing director South Asia, Cushman and Wakefield said in a press release.

The increase in investment was primarily due to a rise in investments in leased income generating office properties by institutional investors, the report states. The total value of investments in the office segment for the first three quarters of 2013 was ₹ 2,476 crore, which is more than double the investments in the same period in both 2011 and 2012.

The total value of investments in the residential segment for the first three quarters of 2013 was recorded at ₹ 2,240 crore, a drop of 11% compared with the same period last year.

“With improving sentiment, deal momentum in the real estate sector is expected to increase in the coming year,” said Dutt.