Indian Realty Likely to Gain More PE Investors in 2017

The year 2016 has been a real boost for Indian realty sector as many investors evidently took the opportunity to invest into Indian real estate because of the positive changes in the regulatory framework. A total of $5.6 billion amount of global capital flow into Indian market was recorded last year. Also, it is observed that the popularity of Private Equity (PE) has increased becoming the second best year in terms of PE inflows after 2007.

According to the report of Venture Intelligence, the Indian market has attracted 19 investments with a total amount of $3.41 billion in the first three months of 2017 which is almost 270 per cent higher than the year-ago period. In the commercial segment, DLF’s investment of $2.14 million in DLF’s rental arm has attracted an all-time high investment worth $2.6 billion across five transactions in the last quarter of 2016.

With these positive outlooks in 2016, this year is expected to be great for enhancing consolidation activity with a further rise in the global capital flow. Moreover, the government has strived to increase transparency and possible listings of Real Estate Investment Trusts (REITs) in 2017 which will be the key to boost foreign and domestic investor participation.

The residential sector looks promising with 12 investments in the first quarter attracting 63% of the volume pie worth $690 million. The western India has collected 8 investments followed by North India and South India with 6 and 5 deals respectively.

The exit volume of Private Equity Real Estate (PERE) investors is 62 per cent down compared to last year which had witnessed 13 exit transactions worth $390 million.

Source: ET Realty

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