The Q1 of 2020 saw strong momentum as covid cases subsided during the early part of Q1 2021 and certain deals were spilled over from 2020 to 2021
As per a report released by Knight Frank India, private equity investors put in $3241 million in Indian real estate through 19 deals in the first quarter of calendar year 2021. This was 16 times $199 million invested by private equity in the Q1 of 2020. The money came in the form of both equity as well as debt investments.
The Q1 of 2020 saw strong momentum as covid cases subsided during the early part of Q1 2021 and certain deals were spilled over from 2020 to 2021.
However, going forward the momentum will depend on how long it will take for the cases to go down as we are witnessing the second wave and pace of vaccination.
Of the total PE investments in real estate, the office segment attracted 71% share, followed by retail at 15%, residential and warehousing with 7% each respectively.
Shishir Baijal, chairman and managing director, Knight Frank India said, “The deal street market of Indian real estate witnessed an impressive surge in both value and volume of private equity investments in the first quarter of 2021, when compared to the entire year of 2020. Office assets continue to be the preferred segment attracting over 70% of PE investments Q1 2021 as the segment moves towards maturity which includes sustained demand, stability in rental income and change in ownership profile over the long term. Investors are expecting demand to recuperate faster as the pace of vaccination increases."
“While Q1 2021 has been an encouraging quarter for PE investments, however, the upward trajectory can be impacted by the rising second wave of COVID-19 infections in India which started in the month of April 2021. The sustainability of revival in investor sentiments will therefore depend on how soon the second wave of infection subsides and the pace of vaccination," he added.