PE IN REAL ESTATE SURGES 33%

Owing to high property prices and high investment potential, Mumbai accounted for about 35% of the total foreign investments in 2015, followed by Delhi NCR (25%).

Structured debt deals accounted for 49% of the total PE investments in 2015. The highest number of structured deal investments happened in Mumbai (32%), followed by Bengaluru (28%).

“Several factors are driving the increase, such as relaxed FDI norms in real estate, wherein, foreign entities are allowed to invest in ready and completed projects, lock-in period have become shorter, repatriation of funds has become easier for investors, and better economic outlook,” said Sanjay Dutt, Managing Director, India, Cushman & Wakefield. He also added that out of the total investment deals, about 72% were through the structured debt strategy in 2015, as compared with only 29% in 2010.

“PE investors are significantly increasing their bets on Indian real estate. The PE funds have a positive outlook of the sector in the medium to long-term horizon,” said Ashish Puravankara, Managing Director, Puravankara Projects.

“When it comes to PE investments, the instruments used are more on the debt side. People are preferring it because they are getting security of the debt instruments along with high returns,” said Nidhi Seksaria, Partner, Real Estate at BDO India.