Realty PE firms to double investments this fiscal
The inflows of PE investments in real estate totalled Rs 15,410 crore in 2014, more than double the investment of Rs 7,360 crore in 2013, according to a report by real estate consultant Cushman & Wakefield
Apr 06, 2015
Source : The Hindu BusinessLine

 

The improving economy and business sentiment seem to be whetting the appetite of private equity players for a larger role play. Realty-focused PE firms are looking to double their investments this financial year.

Higher commitments

For instance, real estate-focused private equity firm ASK Property Investment Advisors has committed to invest about Rs 1,000 crore this financial year. This is exactly double of the Rs 500 crore, the firm had earmarked for last year.

“We didn’t commit too much money last financial year, while most of our commitments came during the last quarter of the year, as the direction of the market went from bad to worse. We were waiting for the markets to show more distress and give us money for money deals,” said Amit Bhagat, CEO and Managing Director, ASK Property.

In this financial year, the company will continue to invest in residential projects with focus on Bengaluru, Pune, Chennai, Mumbai and National Capital Region (NCR). Milestone Capital Advisors, which invested about Rs 500 crore in FY15 across commercial and residential, intends to deploy about Rs 800-1,000 crore this year.

Higher demand from metros

“The real estate sector is definitely looking up this year, and deployments would depend on the apetite in the market. Both residential and commercial sectors would continue to post growth in this year and there is a lot of interest among high networth individuals to invest in the sector,” said Rubi Arya, Vice-Chairman and Director, Milestone Capital Advisors.

For the real estate sector, the high demand continues to flood from the metros, while growth is also coming in from tier-I and -II cities, she added.

“Some markets are very interesting such as NCR and Mumbai, and funds are optimistic, even though pricing is still not attractive. In the last 12 months, investors were looking at fresh asset creation rather than refinancing, which was the norm till now,” Ashish Singh, Managing Director (real estate investment), Standard Chartered Private Equity Advisory.

Rising inflows

The inflows of PE investments in real estate totalled Rs 15,410 crore in 2014, more than double the investment of Rs 7,360 crore in 2013, according to a report by real estate consultant Cushman & Wakefield. However, there are companies opting for a cautious FY16. “According to me, doubling would be very aggressive. We are conservative as we have to see how the markets pan out and how our previous investments are performing,” Indian Property Advisors Pvt Ltd (IPAL) Managing Partner Ramesh Jogani said.

Fund raising

“This year, a lot of fund creation is also expected to happen, and with many preferring equity rather than debt structures,” Standard Chartered’s Singh said.

ASK Property, which launched a Rs 1,500-crore fund last year, will also look at raising funds from offshore markets, Bhagat said, declining to disclose the details of the funds.

On its part, Milestone Capital will also do more funds, while many exits are also expected this year.

Latest Realty News

Due-to-inventory-pile-up-and-price-stagnation,-few-takers-for-new-homes-in-Mumbai-and-Delhi
Apr 06, 2015
MUMBAI: Real estate developers in Mumbai and Delhi are staring at a piling inventory
Credai-plans-to-buy-building-material-in-bulk-in-order-to-cut-costs
Apr 04, 2015
HYDERABAD: The Confederation of Real Estate Developers' Associations of India (Credai) is looking at bulk buying to procure most of the building materials directly from manufacturers
Aam-Aadmi-Party-chief-Arvind-Kejriwal-to-address-rally-against-Land-Bill
Apr 03, 2015
New Delhi: Delhi Chief Minister and Aam Aadmi Party (AAP) Arvind Kejriwal will address a rally against the Land Bill at Jantar Mantar
Land-Bill:-Will-Continue-to-Fight-Against-it,-Says-Jairam-Ramesh
Apr 03, 2015
HYDERABAD: Alleging that the NDA government is anti-farmer, Congress leader and former Union Minister Jairam Ramesh today said his party would fight against the proposed land bill
Land-ordinance-promulgated-again
Apr 03, 2015
New Delhi: The land acquisition ordinance, which the government could not get converted into law in the Rajya Sabha because of stiff opposition, was promulgated again
Real-estate,-gold-worst-performing-asset-classes-in-FY15
Apr 03, 2015
Mumbai: Assets like real estate and gold, long considered defensive bets, floundered in the financial year 2014-15
Developer-to-pay-Rs-25-lakh-for-not-handing-over-flat
Apr 03, 2015
MUMBAI: Over a decade after a Malad resident was cheated of a 620 sq ft flat booked in Marol, the state consumer commission has directed the builder to pay him a compensation of Rs 25.25 lakh
Noida-allows-extra-realty-space-on-Metro-corridors
Apr 03, 2015
NOIDA: Paving the way for extra realty space along the Metro corridors in Noida and Greater Noida, the Uttar Pradesh government has approved an increase in the floor area ratio (FAR) by 0.5
‘Sans-road-map’,-smart-cities-‘figment-of-imagination’
Apr 03, 2015
PANAJI: The central government's plan to create 100 smart cities in the country appears to be nothing more than a figment of imagination
CAG-raps-govt-on-Lingaraj-shrine-land-encroachment
Apr 03, 2015
BHUBANESWAR: With hundreds of acres of Lingaraj Temple land under encroachment, the comptroller and auditor general (CAG) has come down heavily on the state government

Latest Realty News Of State

Realty Talk's