PE investments in real estate down 40% at $ 4.06 billion in 2020
India attracted private equity investments to the tune of $38,149 million in the calendar year 2020. Of the total PE investment, the real estate sector claimed 11% share in 2020 with $4,068 million, closing 21 deals during the year, Knight Frank said
NEW DELHI : Private equity investments in real estate fell 40% year-on-year to $4.06 billion in 2020 because of the Covid-19 pandemic, according to Knight Frank India. Private equity (PE) investments in 2019 stood at nearly $6.8 billion. "India attracted private equity investments to the tune of $38,149 million in the calendar year 2020. Of the total PE investment, the real estate sector claimed 11% share in 2020 with $4,068 million, closing 21 deals during the year," Knight Frank said in a statement.
As per the data, investments in office assets fell to $2,509 million last year from $3,258 in 2019. In retail real estate, the inflows declined to $220 million from $922 million. PE investment in warehousing decreased to $971 million from $1,895 million. The residential real estate segment saw an inflow of $368 million in 2020 as against $717 million in the previous year.
"Despite a slowdown in overall PE investment, we continue to witness a strong investor appetite for rent yielding office assets. Knight Frank believes that with more clarity on the pandemic resolution and sense on structural changes, the deal activity is expected to pick up further in 2021," said Shishir Baijal, chairman and managing director, Knight Frank India. Rajani Sinha, chief economist and national director – research, Knight Frank India, said the country witnessed sharp resurgence in investor sentiments towards the end of the year, after a temporary lull due to the global lockdowns in early 2020.
"The real estate sector in India witnessed private equity investments to the tune of $4.1 billion in 2020 of which $2.64 billion (64% of annual investments) came in the last quarter of 2020," she said.
Since 2011, investors are putting money through both debt and equity structures.
However, Sinha said there is a shift in investors' risk appetite as 96% of total PE investment was through the equity route in 2020.