Feb 09, 2016 09:44 AM IST | Source: PTI

PE investment in realty up 80% at Rs 19,500 crore in 2015

"The year gone by was interesting for capital market activities in real estate. 2015 proved to be a good year for key Indian metros as inflows into real estate by PE funds was at a record high.

PE investment in realty up 80% at Rs 19,500 crore in 2015

Private equity (PE) investments in real estate rose by 80 percent to Rs 19,500 crore last year, with most of the deals in income-yielding office projects, according to property consultant JLL India.

"The year gone by was interesting for capital market activities in real estate. 2015 proved to be a good year for key Indian metros as inflows into real estate by PE funds was at a record high.

"The total investment that the sector got was approximately Rs 19,500 crore," said Shobhit Agarwal, MD- Capital Markets, JLL India.

The PE investment in real estate sector was Rs 10,800 crore in 2014. Mumbai Metropolitan Region (MMR) received the maximum chunk of this investment at 34 percent followed by Delhi-NCR at 29 percent and Chennai at 14 percent.

Bangalore and Pune got 11 percent and 5 percent, respectively. Hyderabad got 3 percent while all the remaining cities put together got 4 percent in PE investment. Going forward, Agarwal said investors are expected to remain focused on the top seven cities only.

"In the past few months, Chinese and Japanese investors have shown interest in bringing their long-term money into India.

"Overall, the stage is set for a superlative show this year. We won't be surprised if 2016 shows a glimpse of investment activities that were seen in 2007, which was the previous peak and saw an investment of more than USD 8 billion," he added.

During 2015, the residential projects attracted considerable share of funding although equity investment in this space is still insignificant.

On the contrary, income-yielding office projects attracted a majority of equity investments. While residential and office will continue to attract a majority of investments, retail is expected to start seeing better traction, JLL said.

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