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Pune happens to be a favoured destination for real estate private equity funds since foreign direct investment was opened up for real estate in 2005.
Most of the funds are based out of Mumbai, which gave Pune obvious preference, as its close proximity allows easy tracking and monitoring of the market and their investments. Further, Pune is among the most rapidly growing cities in India after Mumbai, NCR and Bangalore, said Mr Sameer Gholve, Manager - Capital Markets, Jones Lang LaSalle India.
The total flow of PE funds into Pune up to December 2011 was about $800 million. This consists of both foreign and domestic monies through 32 major transactions over the last five years. The year 2009 saw the lowest flow of private equity funds into the city, though Investors regained confidence in 2010.
Sixty one per cent of the total private equity flows were into residential projects in East Pune. East Pune has the majority of the city's IT industry developments such as Magarpatta Cyber City in Hadapsar, EON IT Park in Kharadi, CommerZone in Yerawada and Weikefield IT Park on Nagar Road, he said.
The development in IT has had a major spin-off effect on the profile of these areas. The higher spending power and commensurate aspirations of the people working in these establishments has led to massive malls coming up in the locality and in turn generated a huge demand for quality residential projects, he added.
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