PE firms pour $477 million in real estate sector in Q2

Private equity investment in real estate rose 24% year-on-year to USD 477 million (about Rs 3,500 crore) during the July-September 2021 period but fell 45% 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 COVID19 pandemic.

According to the report, data centres garnered the highest share of about 34% 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%) 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.