PEs Invest Around $3.4 Bn In Real Estate Over 2022: Report

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According to international property consultant Savills, private equity investments in the Indian real estate industry stood at $3.4 billion, or around Rs 271 billion, at the end of 2022, remaining at levels seen in 2021.

According to data, commercial office assets will continue to be the frontrunner in 2022, accounting for nearly half, or 45 per cent, of the investment pie. Residential and retail sectors grew strongly as well, fueled by end-user demand.

The year 2022 saw the largest acquisition of an operational retail asset in India in the previous five years, as well as one of the lowest residential inventory overhangs in more than a decade.

Persistent geopolitical challenges, including the Russia-Ukraine war, high global inflation, a new Covid outbreak, and a Chinese lockdown, have slowed global post-pandemic economic recovery. Despite these economic pressures, private equity investments in Indian real estate assets provided attractive opportunities for both global and domestic institutional investors.

In 2023, Savills India anticipates $3.5 billion to $4.0 billion in private equity investments in real estate. Growth in India’s manufacturing sector and economic digitisation are likely to drive investments in the industrial and warehousing, data centres, and life sciences sectors.

“Commercial office remains the preferred investment product in India which absorbs around a third of the total Apac office demand by space. With the increase of office REITs, this trend will grow as domestic investor participation increases. Data centres have been the second most visible investment product in 2022. India remains a favourable destination for global real estate investors despite the global events and we will witness newer offshore capital enter India in 2023,” said Diwakar Rana, managing director, Capital Markets, Savills India

It is estimated that India has the potential to generate a demand for life sciences R&D lab spaces of around 10 million square feet per year until 2030. This could provide ample opportunity for institutional investors to increase allocations to the sector, particularly in the development space.



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