Private equity investment in real estate in India fell by 44% to $3 billion in 2023. In terms of PE investment distribution in 2023, offices topped the list at 58%, followed by warehousing at 23% and residential real estate. 19%. Knight Frank India, in its report ‘India Private Equity Investment Trends 2023’, said the retail sector did not see any PE deals in 2023.
Global geopolitical uncertainty and high interest rate environment due to multiple interest rate hikes by the US Federal Reserve and the Central Bank of Canada have suppressed investment activity from the US and Canada, which will be recorded in 2022. This led to a significant decrease of 44% year-on-year (YoY) from $5.3 billion. However, PE investments from Singapore to Indian real estate rose significantly from 31% in 2022 to 53% in 2023.
According to the report, Mumbai ($1.685 billion/$1.6 billion), National Capital Region ($835 million) and Bengaluru ($347 million) will receive the highest proportion of investment in each sector in 2023. Ta.
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“India’s office sector continued to attract investor preference due to the resilience exhibited by high-quality assets, while the warehousing sector maintained its position as an increasing favorite among investors. 2023 Foreign investors continue to be the main contributors of investment in 2020, followed by domestic investment companies. We have also recently witnessed increased interest from private equity (PE) players in Asia.” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
The office sector will continue to be the largest investment destination in 2023
The office sector received $1.8 billion in investment in 2023. Approximately 91% of investment in 2023 will go to completed assets and 9% to assets under construction, indicating a trend toward cautious investors. In 2023, PE investment in the office sector decreased by 29% year-on-year. While there were significant deals in the first half of 2023, including GIC’s $1.4 billion investment in Brookfield India Real Estate Trust REIT, the second half of 2023 was weak. Patterns of private equity investment. Mumbai, NCR and Bengaluru have emerged as the top destinations for office investments in 2023.
The housing sector raised $577 million. Investment amount in 2023
Private equity investments in the housing sector were primarily directed to projects under construction, with a focus on early-stage investments. As much as 82% of his investments in the housing sector were received from foreign private equity players. NCR and Bengaluru have emerged as major investment hubs, driven by development-stage deals involving a number of prominent global players.
Investment in warehousing sector to reduce to total $684 million in 2023
this is. . .was That’s down from $1.9 billion recorded in 2022. The lack of high-quality, ready-to-use assets was a factor in the reduction in investment within the warehousing sector. Private equity investors are actively exploring various sub-sectors within the warehousing market, with a particular focus on areas such as e-commerce, logistics, and third-party logistics (3PL) facilities. Despite the observed decline in private equity investments in the warehousing sector in 2023, the outlook for this asset class remains optimistic.
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There were still no PE deals in the retail sector.
Private equity deals will still be absent in the retail sector in 2023 due to growing concerns about the global economy and rising interest costs, according to the report, with investors urged to be cautious, especially when it comes to large investments. ing.