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India was ranked 20th among the top 20 real estate investment markets globally with investment volume of Rs 19,000 crore recorded in 2012.
According to Cushman & Wakefield’s latest report, International Investment Atlas, China remained the largest global investment market overall thanks to the surge in land sales seen in late 2012. The US was placed in the second position, followed by the UK in third place.
The majority of the investment in India was through institutional sales (67 per cent), while the remaining was through private equity (PE) investments (33 per cent). The market witnessed institutional sales (excluding apartments) of Rs 12,800 crore, concentrated in commercial development sites and the office segment, including standalone and pre-leased office buildings. While the investments in institutional sales declined 37 per cent over the last year, private equity investment in India increased by 7 per cent in 2012 and was noted at Rs 6,200 crore, the report said.
In terms of value, the majority of private equity in real estate (PERE) investments were noted in ready income generating / operational office assets at Rs 3,230 crore, which saw an increase of 34 per cent over 2011. Under-construction residential projects continued to witness the highest number (25) of PERE deals in 2012 and witnessed private equity investments at Rs 2,850 crore.
Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield said, “Investment in ready income generating / operational office assets have gained strength over the last few years due to lower risk and steady cash flows associated with this type of investment.”
On the PERE front, Bangalore witnessed the highest number and value of private equity investments at Rs 3,250 crore in 2012, recording over double the investment of last year, followed by Mumbai with Rs 1,300 crore and NCR with Rs 700 crore of investments. However, in comparison with 2011, Mumbai saw a decline of 2 per cent, while NCR witnessed a decline of 44 per cent in total value of investments.
“Bangalore witnessed some high-value investments in pre-leased office assets, which has led it to be the top-runner in the PERE market. However, NCR and Mumbai continue to be preferred locations for investments due to the opportunity they offer. The NCR market in 2012 saw a lower number of investments as it is an active residential sales market, which obviated the need for PE funding in many projects,” Dutt added.
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