June-September sees 90% of entire year’s realty spends by PE

NEW DELHI: Private equity (PE) investments in India’s real estate sector picked up in June-September, as the lockdown was being lifted gradually. In those months, the real estate sector attracted $2.1 billion — 90% of the total PE investment of $2.3 billion in 2020. In January-May, only $238-million PE investments had come into the sector.

During January-September of 2019, the sector had attracted $5.3-billion investment.

Of the total PE investments in real estate in January-September, the office segment attracted the largest share of $1.9 billion — 81% of the total pie, said property consultant Knight Frank in a report. Up to 92% of total PE investment in the office space came during June-September. As against $141-million investments in January-May, $1.7 billion came in June-September.

The residential sector attracted $176 million in June-September, which constituted 92% of the total investment of $216 million during the year so far. Only $40 million had come in the segment during January-May. “PE investors have taken advantage of the economic slowdown to scout for grade A assets with strong growth trends, resulting in positive investment activities in all the segments of the real estate sector,” said Shishir Baijal, CMD, Knight Frank India.

The average deal size for office investments was also higher in January-September 2020 than the full year of 2019. Baijal said globally, investors assess economies’ resilience and growth momentum to make large-scale investments. Though impacted, India’s economy was expected to see an accelerated recovery in the next few months, he said.

The office market remains a preferred segment for investors due to strong fundamentals. However, due to the pandemic-led slowdown, PE investment of $1.9 billion in 2020 so far in the office segment was down by 31% from $2.7 billion during the same period last year.

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