PE Investment in real estate jumps 24 pc annually in Jul-Sept at Rs 3,500 cr: Report

Private equity investment in real estate rose 24 per cent year-on-year to USD 477 million (about Rs 3,500 crore) during the July-September 2021 period but fell 45 per cent as compared with the previous quarter, according to Savills India.

PE inflows in real estate had stood at USD 385 million in the year-ago period and around USD 900 million in the previous quarter.

In its latest report 'India Investment Market Watch', Savills India attributed the temporary slowdown in investment activity to delayed decision-making by investors in the face of the COVID-19 pandemic.

According to the report, data centres garnered the highest share of about 34 per cent in total private equity investments in the third quarter of calendar year 2021.

"Data centres have proven to be resilient to the impact of the current pandemic in India. With the growing need for digital connectivity leading to a sharp rise in data usage, the demand for data centres, too, has soared," the report said.

The consultant said the investment inflow amounted to USD 3.3 billion (Rs 23,300 crore) during January-September 2021, equivalent to almost half (49 per cent) of the total investment inflows that the sector witnessed in the entire 2020.

In the calendar year, the PE investment in real estate stood at USD 6.6 billion as against USD 6.7 billion in 2019, USD 6 billion in 2018, USD 7.7 billion in 2017 and USD 5.7 billion in the 2016 calendar year.

"As the vaccine programme has picked up speed, we will see business confidence gaining momentum. In spite of the pandemic, the year 2021 has continued to witness some marque deals across real estate segments," said Diwakar Rana, managing director, capital markets, Savills India.

The September 2021 quarter also witnessed India's maiden investment by a global pension fund in life science R&D asset, where Ivanho Cambridge and Lighthouse Canton jointly invested USD 100 million (Rs 740 crore) in life science R&D facilities in Genome Valley, Hyderabad.

Savills expects India to further cement its position in the global life science arena in the post-pandemic world, thereby presenting a lucrative opportunity for private equity investors focusing on life science R&D (research and development) real estate.

Savills Plc is a global real estate services provider listed on the London Stock Exchange.

Savills India is a group company of Savills Plc and is a premier professional international property consulting firm.

Started in India in 2016, the company employs over 400 professionals.

Recently, property consultant JLL India came out with a report suggesting that the institutional investment (which includes PE and other inflows) in real estate increased 17 per cent year-on-year to USD 721 million in the July-September 2021 period.

During the January-September 2021 period, the institutional investment rose to USD 2,977 million from USD 1,534 million in the year-ago period, the JLL data showed.

Institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. It also includes anchor investors in real estate investment trusts (REITs)