PE investments into real estate up a tad in first 9 months


Indian real estate, especially the commercial segement, continues to hold the interest of global as well as the domestic institutional investors, as can be seen from the investments made so far in this year.  Data from Venture Intelligence show that private equity (PE) investment in real estate in the first three quarters of the year rose marginally to touch $3.16 billion across 40 deals. There has been an increase in the average investment size too as similar inflow was registered during the year-ago period across 66 transactions. 


The cumulative PE investment figures in real estate so far are up, however, only marginally compared to $3.14 billion across 66 deals in the same period in 2016.


In the third quarter, commercial space continued to dominate in terms of volume and value. The September quarter saw six deals worth $356 million being announced in the commercial space as against five deals worth $340 million in the residential space. Real estate companies and projects attracted 11 investments worth $696 million. Q2 saw 12 deals worth $1.23 billion, as per the data. 


“The year 2017 will be steady in terms of institutional investment into real estate. More long term and patient capital from stronger entities such as pension and sovereign funds are entering into the sector. The platform transactions are driving the inflow. These are frontloaded commitments towards India and will have cascading effect going forward,” said Arun Natarajan, founder of Venture Intelligence, a data analytics firm Allianz Group, in its first-ever real estate related engagement in India, partnered with Shapoorji Pallonji Group to create an investment platform for office properties here. The Singapore domiciled, rupee-denominated and closed-ended fund is aiming to raise $500 million in equity, of which $250 million will be infused by Allianz.


“We are looking to deploy approximately 60% of our Asia-Pacific allocation to growth economies. The Indian economy has been consistently outperforming. Strong secular growth, stellar demographic trends, and improving transparency are supporting stable real estate occupiers as well as investor demand, in particular the office sector, which is ideal for long-term core investors like Allianz,” Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate said while announcing the pact with Shapoorji Pallonji Investment Advisors.

Written by The Realty Paper

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