Private equity inflows in realty dip 22% in Q1

Berlin: Private equity investment in real estate fell by 22 per cent to Rs 10,080 crore during April-June quarter, even as the inflow in office segment rose by nearly 40 per cent, according to property consultant Cushman & Wakefield.

PE investment in real estate stood at Rs 12,970 crore in the year-ago period. The consultant and realtors' body CREDAI released a joint report at a conference held here.

The CREDAI-C&W report said that although PE inflows into real estate dipped 22 per cent year-on-year (Y-O-Y) to Rs 10,080 crore during the second quarter, it was still second highest investment in Q2 in the last 11 years.

According to the report, the PE inflows in housing segment fell to Rs 1,510 crore from Rs 2,290 crore during the period under review. However, the inflows in office segment, which is in demand from both domestic and global investors, rose to Rs 4,300 crore during the second quarter of 2018 from Rs 3,090 crore in the year-ago period.

Mixed use projects saw PE inflows of Rs 1,850 crore, up from Rs 610 crore in the year-ago period.

In retail segment, PE investment fell to Rs 1,740 crore from Rs 2,840 crore during the period under review. Industrial segments saw a sharp fall in PE inflows to Rs 680 crore from Rs 3,760 crore.

"The surge in office investments was an expected trend, in line with our observations made in Q1 2018, during which there was a forecast of some marquee deals in the office sector by private equity majors," C&W India Country Head and MD Anshul Jain said.

As office space supply and demand continue to experience a robust increase, coupled with the emergence of co-working spaces in a phenomenal way, he said the investor confidence in the sector would continue to remain intact.

Retail also continues to grow strong, with declining mall vacancy rates constituting the heightened investor interest in this sector, Jain said.

Investment inflows in Mumbai fell during this quarter at Rs 2,800 crore although the city still receives the highest investments observed among the major cities.

Leading the investment volume among all cities with a share of 28 per cent, Mumbai noted the quarter's largest transaction with Brookfield Asset Management acquiring Essar Group's Equinox Business Park in Bandra Kurla Complex for Rs 2,400 crore.