Mumbai: The city attracted 40% of the $2.4 billion (around Rs 15,500 crore) private equity (PE) investments in the Indian real estate between January and September 2015.
Global real estate consultant Cushman & Wakefield, which released its report on Wednesday, said the total PE investment this year was the highest since 2008. The investments come when the office absorption across top eight cities is estimated at 158 million sq ft during 2015-19, it added. The PE investment this year is an increase of 84% over the corresponding period in 2014.
The figures were released in the annual real estate investment publication, '`India Real Estate-Resurgence on the Anvil' in association with the Global Real Estate Institute.
Delhi-NCR and Mumbai remained the top contributors in attracting PE investments this year. Mumbai attracted the highest PE investment volume with over Rs 7,000 crore, followed by Delhi-NCR, which garnered a 24% share.
"The increase in momentum may be attributed to a few large deals in Mumbai and Delhi-NCR. With Indian banks shying away from lending to developers, developers are becoming more reasonable in pricing to attract investors,'' said the report.
The residential sector attracted majority (77%) of the PE investment volume between January and September 2015. "This year appears to be heralding a revival of interests of private equity investors in real estate,'' said Sanjay Dutt, MD, India, Cushman & Wakefield. "There has also been a return of some blue chip investors who had withdrawn a few years ago, re-entering the Indian real estate market with direct investments. A number of Chinese investors have also been showing strong interest,'' he said.
Robert Marten, MD, Global Real Estate Institute, said global investors were looking for four key pillars for investment, mainly market demand, governance, transparency and liquidity. "None of the rival real estate markets can boast as much progress as India,'' he said.
The report said overall urban housing demand in India is expected to grow by nearly 15 million units by 2019-end. The top eight cities will contribute 3.4 million units to this overall demand. Within the top eight cities, the middle-income group will be the primary demand driver, accounting for 41% or 1.4 million units. "Demand is expected to outstrip supply by roughly 2.5 times. At least a quarter of this demand will be contributed by Delhi NCR,'' it said.
In the commercial side, Thane-Belapur Road is expected to be the most sought after destination for back-office grade A office space.