PE investment in realty up 27 pc during Jan-Sept



The rise is PE investments have increased the institutional investors towards leasing activity increasing income from office buildings.

Rise in PE infusion was observed despite slow pace in the realty market with net absorption is offices dipped by 16 pc.

There are various factors affecting the growth in the property market such as slower GDP growth, inflationary pressure, upcoming polls, volatility in forex and stock markets, and regulatory impact.

Apart from the offshore funds, domestic capital allocated for income producing office properties also raised and deployed.

About 68% of the overall PE investment this year was seen in 3rd quarter at Rs 4,058 crore.

However, the PE infusion in office sectors saw more than double jump at Rs 3,476 crore ($397 million) in first three quarters of 2013 against year-ago period, the housing segment faced plummet of 12% at Rs 2,340 crore ($359 million).

Investors are more interested in the leased office buildings which have been increased over the past few years with sector adding 55 pc of the overall investments in 2013 compared to 37 pc and 31 pc in 2012 and 2011, respectively.

The total numbers of deals in the first three quarters of 2013 dropped to 22 down from 28 compared to the same period in 2012 showing a surge in average deal size by nearly 63 pc to Rs 227 crore.

Bangalore observed the largest PE infusion at Rs 1,979 crore, an up gradation of 80pc compared with the same period last year.

Apart from housing and office segments, the other asset classes such as retail and hospitality are witnessing weak investor interests as both are currently overwhelmed by high inventories and sluggish demand.

Leave a Reply

Your email address will not be published. Required fields are marked *