NEW DELHI: Private equity investors have injected USD 10.7 billion (Rs 843 billion) into the real estate sector across nearly 100 deals from 2021 to 2023, according to a report by Savills India.
While the USA and Canada origin funds were primary sources in the past, there is now increased interest from Asian investors, particularly from Singapore, Japan and Hong Kong. The share of investments from Asian investors surged from 15% in 2019-2020 to 47% in 2021-2023, signalling rising confidence in the Indian market.
Transaction volumes have increased by over 25% annually, with investment values rising 13.7%, reaching USD 3.9 billion in recent years. The average deal sizes have ranged between USD 100-120 million (Rs 8.3-9.9 billion) during this period.
The office segment secured the majority share of investments at 51%, followed by industrial & warehousing at 20%, according to the report.
In response to limited availability of core assets and growth potential in the Indian real estate market, private equity institutional investors are increasingly diversifying into land deals. The share of land transactions in overall PE investments surged from 5% in 2021 to 26% in 2023, with a sixfold increase in deal volume during this period.
Mumbai remains a key focus for investors, capturing 57% of cumulative land investments during 2021-2023. Tier II cities received USD 167 million (Rs 14 billion) of PE investments during 2021-2023.
Institutional investments in commercial real estate could reach USD 3 billion (Rs 240 billion) annually, potentially funded through private equity, developers’ funds, or joint-development efforts.
