Real Estate PE investment: Singapore triples private equity fund in Indian commercial realty to $3.5 billion

Singapore investors are betting big on Indian commercial real estate and other new sunshine sectors, including logistics and warehousing. Major Singapore-based private equity firms are funnelling billions of dollars into the country's real estate sector, particularly in South Indian cities. Industry experts say that around 1/3rd of the net PE investment in India has come from Singapore between 2015 and 2018. In fact, with their more patient and long-term outlook, Singapore-based investors and developers have gained a substantial foothold in India’s property market over the last four years. In 2015 and 2016, Singapore-based PE players pumped USD 1.15 bn into Indian real estate. This saw a three-fold jump in 2017 and 2018 - to nearly $3.5 bn. 

Speaking on the matter Shobhit Agarwal, MD & CEO at ANAROCK Capital told Zee Business online, "Singapore-based investors and developers have gained a substantial foothold in India’s property market over the last four years. In in 2015 and 2016, Singapore-based PE players pumped $1.15 bn into Indian real estate. This saw a three-fold jump in 2017 and 2018 - to nearly $3.5 bn."  Shobhit Agarwal went on to add that of the total $14.01 bn PE funds into Indian realty between 2015 to 2018, around 1/3rd were pumped in by Singapore-based firms alone during the period – the highest among both domestic and foreign investors. However, of the total PE inflow of $1.1 bn in Q1 2019, there were no investments from any of the Singapore-based PE investors such as GIC, Ascendas and Xander. 

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Elaborating upon the reason for rise in PE investment in Indian real estate, especially commercial real estate Rakesh Yadav, CMD, Antriksh India Group said, "With funding from banks and NBFCs drying up over the last few years, Indian developers were being forced to explore debt and equity funding from various private equity players. Singapore investors were on top of the list, followed by PE players from US and Canada. After establishing a strong base in China, India was their logical next destination of preference." 

Rakesh Yadav of Antriksh India Group said that major players including GIC, Ascendas-Singbridge and Xander have been making steady investments into India. However, in recent years they have scaled up their investments and developments across segments. Besides commercial spaces including office and retail, players like Ascendas are also diversifying their portfolios and eyeing sunshine sectors like logistics and warehousing.