PE Investment in Realty Sector Jumps Two fold to Rs 8,900 cr
To meet capital requirements, developers are increasingly partnering with PE funds, according to real estate consultancy firm, Cushman and Wakefield
Nov 03, 2014
Source : The New Indian Express
Cushman and Wakefield

 

BANGALORE: The festive season failed to bring cheer to the real estate sector. But Private Equity funding into the sector saw a two-fold jump at Rs 8,900 crore till September this year when compared to the same period last year.

According to the data released by real estate consultancy firm, Cushman and Wakefield, the growth of the first three quarters of 2014 is over 21 per cent higher than the year ago period.

“This year alone PE funds have invested close to Rs 8,900 crore ($1.5 billion) in the real estate sector until September 2014, more than double the amount invested during the corresponding period in 2013 (Rs 4,270 crore/$ 0.7 billion),” C&W said in its report.

The higher increase has been mainly due to under construction projects and acquisitions of leased office assets, agencies quoted from the report.

The number of deals was up to 46 in only the first three quarters when compared to 40 recorded in the whole of last year.

“Post the global economic slowdown in 2008, the RBI had discouraged banks from providing capital to the real estate sector. This led to an increase in cost of capital for developers borrowing from other lending sources, which was quite high and availability for which was limited.

“To meet capital requirements, developers are increasingly partnering with PE funds,” the consultancy firm reportedly said.

 

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