Global PE funds more than doubled investments in Indian realty: C&W
May 08, 2014
Source : The Times of India


BANGALORE: Global private equity funds more than doubled their investment in India's real estate sector in the quarter to March as they foresee an improvement in economy leading to stable long-term yields, according to a report by brokerage Cushman & Wakefield, PE funds invested Rs 2,800 crore in the country's commercial and residential real estate during the period, a 145% jump over the year-ago quarter, the report said.

"This is the highest quarterly private equity investment since Q2 of 2009 by private equity funds in the realty sector, driven by huge investment in commercial real estate and steady fund raising by developers in the residential asset class," it said.

Sanjay Dutt, executive managing director for South Asia at Cushman & Wakefield, said investor interest is expected to grow in office as well as residential property this year. "Improving economic conditions and stable long-term yields are expected to result in increased investor interest for commercial office assets in 2014," Dutt said. "Considering the attractive returns in the residential sector, along with the high funding needs of developers, steady investments in the residential sector are anticipated."

The report said average deal size increased 35% to Rs 156 crore per transaction during the quarter. The construction development sector saw foreign direct investment (FDI) inflows worth Rs 1,430 crore in the quarter, which is the highest level of investment since the third quarter of 2009. The report said global fund houses such as Xander Group, Peninsula Brookfield, Stan-Chart RE and Blackstone committed big bucks to the Indian real estate sector. While Blackstone and Standard Chartered together invested in Rs 1,150 crore in Vrindavan Tech Village, a special economic zone being developed by Embassy Group on the outskirts of Bangalore, Mantri Developers raised Rs 250 crore from Peninsula Brookfield for a residential project in Bangalore and Oberoi Realty bought a land parcel in Mumbai from Tata Steel for Rs 1,155 crore.

"Most investors, especially those who are growth investors, don't see this sector as a very attractive investment destination currently. This may be a great opportunity for those who can price the fundamentals, work the real estate, have a longer-term view, a stomach for volatility and patient capital," said Siddharth Yog, founder and managing partner at Xander Group Inc.

Jasmeet Chhabra, principal at Red Fort Capital, said the last three years did not see much FDI in the real estate sector, but things are improving now. "It has become more lucrative in terms of valuation, demand-supply mismatch continues to hold. Once we see a stable government, the deal momentum will pick up," he said.

While the commercial office sector saw investments worth Rs 1,440 crore during the quarter, the residential sector got Rs 1,070 crore of inflows, contributing about 51% and 38%, respectively, to overall investments mentioned in the report. "The capital would help fund much needed real estate investment to create and hold facilities to house the economic activities," said Jonathan Yap, assistant group CEO for overseas funds and India at Ascendas.


Latest Realty News

Xander, Dutch pension fund APG to go on $300m office buying spree
May 08, 2014
BANGALORE: Emerging markets investor Xander and Dutch pension fund APG have partnered for a Indian venture that would deploy $300 million (or Rs 1800 crore) to buy tenanted office spaces across the country's top metros.
Inflation makes rental income underperform
May 08, 2014
BANGALORE: I live in a centrally located area of Bangalore. A canal bifurcates the main road into the ‘rich’ and ‘poor’ areas. On the affluent side of the canal, hotels, restaurants and highrises dot the street. The real estate rates hover between Rs 12,000 and Rs 15,000 a square feet. On the other side – home to a garbage dump – the rates are about Rs 3,000 a square feet.
Property prices crash 30% as buyers hold on cash till election verdict
May 07, 2014
BANGALORE|MUMBAI|NEW DELHI: Not all asset classes have been on a bull run in anticipation of the election result on May 16, when votes will be counted. Stocks may have been surging over the past few months but the secondary residential market has been going the other way, according to anecdotal evidence and the data that's available.
Land scam comes to light in Bangalore suburbs
May 06, 2014
BANGALORE: Have you registered a site or building on revenue land in Bangalore’s outskirts in the past year or so? Just ensure the documents are authentic.
Go for property over gold, this Akshaya Tritiya
May 03, 2014
BANGALORE: With the festive time here, a buyer has to start evaluating various investment options for better returns. The dilemma of whether to invest in a property or gold is not new but the situation is different this year. Experts believe that the economy is showing signs of improvement. Therefore, it bodes well for the growth of the real estate sector and depicts a hard time for gold. There is a chance that the rupee will gain strength over the dollar due to higher growth in the economy and
Mayor puts on hold hike in SWM cess,property tax
May 02, 2014
MANGALORE: Unshackled from bonds of the model code of conduct, mayor Mahabala Marla has asserted an assurance that Congress gave to the electorate on the eve of elections to the Mangalore City Corporation in March 2013 - no hike in taxes.
CREDAI holds games for construction workers
May 02, 2014
BANGALORE: The Confederation of Real Estate Developers Association of India (CREDAI) celebrated Labour Day by holding athletic games for labourers.
Home buying trends, this Akshay Tritiya
Apr 28, 2014
BANGALORE: Property is invariably the single-most rewarding investment many people make in their lifetime. This Akshay Tritiya, make the most of the auspicious time to own your dream home. It certainly pays to stay invested in the real estate market. It cannot be disputed that property is an interesting investment commodity, which yields both, the rental income and capital gains. These days, it is not uncommon to find investors owning more than two homes. It is for this reason that an increasin
Commercial, retail development gathers pace in Bangalore East
Apr 27, 2014
BANGALORE: Bangalore east has matured into a self-sufficient region with a good mix of commercial, residential and retail real estate segments. With good connectivity through the Outer Ring Road (ORR), Whitefield Road and the Old Madras Road, localities in the east continue to witness interest from the commercial and retail sectors. The planned extension of the Metro line right up to Whitefield is giving impetus to further growth in the region.
Demand for homes in Bangalore set to pick up in new FY
Apr 26, 2014
BANGALORE: According to the World Bank’s Global Economics Prospects report released in January, global growth is expected to witness an uptrend, from 2.40 percent last year to 3.20 percent this year and 3.40 percent in 2015. While the report estimates the Indian economy could grow at 6.20 percent in 2014-15, the Asian Development Bank is also positive with a 5.50 percent projection for the new fiscal. With the US indices looking better, the Indian economy is also expected to pick up gradually th

Latest Realty News Of State

Realty Talk's