Private equity investment in realty sector jumps over two-fold to Rs 8900 crore

Private-Equity-Investment-to-grow-in-Delhi-NCR-real-estate-market

Private equity investment in the real estate sector jumped more than two-fold to Rs 8,900 crore till September this year as developers were forced to raise funds from PE firms to meet their capital requirements.

“This year alone PE funds have invested close to INR 89 billion (USD 1.5 billion) in the real estate sector until September 2014, more than double the amount invested during the corresponding period in 2013 (INR 42.7 billion/USD 0.7 billion),” C&W said in a report.

PE investments in the realty sector during the first three quarters of 2014 have surpassed the total investment levels for 2013 by 21 per cent, it added.

“This substantial increase in investments has been predominantly in under construction residential projects followed by acquisitions of leased office assets,” the report said.

Total number of deals also increased to 46 in the first three quarters of 2014 compared to 40 in the whole of 2013.

“Post the global economic slowdown in 2008, the RBI had discouraged banks from providing capital to the real estate sector. This led to an increase in cost of capital for developers borrowing from other lending sources, which was quite high and availability for which was limited.

“To meet capital requirements, developers are increasingly partnering with PE funds,” C&W said.

The consultant said that investment activity, which was vibrant in the first two quarters of 2014, gained further momentum in the third quarter.

“Investments worth INR 49 billion (USD 0.8 billion) were committed during the third quarter. While domestic funds contributed majorly (57 per cent) to the overall investments in 2013, foreign funds dominated in the first three quarters of 2014 with a 69 per cent share in overall PE investments,” the report said.

In terms of locations, Delhi-NCR, Mumbai and Chennai witnessed increased investments from PE funds during the first three quarters of 2014, with an increase in both transaction volume and number of deals from the corresponding period last year. Investment levels in Bengaluru remained stable while it declined in Pune.

About 41 per cent (INR 36.7 billion/USD 0.6 billion) of the total investments during the first three quarters of 2014 was witnessed in Delhi-NCR, which is an increase of close to 6 times compared to the first three quarters of 2013. In NCR, the PE investments were primarily in leased office assets.

By asset-class, office sector attracted highest PE investments at Rs 4,420 crore. Residential sectorwitnessed investments of close to Rs 4,180 crore while retail sector saw PE investments of Rs 300 crore.

Investor interest in the hospitality sector remained low with no investments in the segment recorded till September 2014.

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Source : http://articles.economictimes.indiatimes.com/2014-11-02/news/55682565_1_pe-investments-pe-funds-realty-sector

Private equity investment in realty sector jumps over two-fold to Rs 8900 crore

Private equity investment in the real estate sector jumped more than two-fold to Rs 8,900 crore till September this year as developers were forced to raise funds from PE firms to meet their capital requirements, property consultant Cushman & Wakefield said.

“This year alone PE funds have invested close to INR 89 billion (USD 1.5 billion) in the real estate sector until September 2014, more than double the amount invested during the corresponding period in 2013 (INR 42.7 billion/USD 0.7 billion),” C&W said in a report.

PE investments in the realty sector during the first three quarters of 2014 have surpassed the total investment levels for 2013 by 21 per cent, it added.

“This substantial increase in investments has been predominantly in under construction residential projects followed by acquisitions of leased office assets,” the report said.

Total number of deals also increased to 46 in the first three quarters of 2014 compared to 40 in the whole of 2013.

“Post the global economic slowdown in 2008, the RBI had discouraged banks from providing capital to the real estate sector. This led to an increase in cost of capital for developers borrowing from other lending sources, which was quite high and availability for which was limited.

“To meet capital requirements, developers are increasingly partnering with PE funds,” C&W said.

The consultant said that investment activity, which was vibrant in the first two quarters of 2014, gained further momentum in the third quarter.

“Investments worth INR 49 billion (USD 0.8 billion) were committed during the third quarter. While domestic funds contributed majorly (57 per cent) to the overall investments in 2013, foreign funds dominated in the first three quarters of 2014 with a 69 per cent share in overall PE investments,” the report said.

In terms of locations, Delhi-NCR, Mumbai and Chennai witnessed increased investments from PE funds during the first three quarters of 2014, with an increase in both transaction volume and number of deals from the corresponding period last year. Investment levels in Bengaluru remained stable while it declined in Pune.

About 41 per cent (INR 36.7 billion/USD 0.6 billion) of the total investments during the first three quarters of 2014 was witnessed in Delhi-NCR, which is an increase of close to 6 times compared to the first three quarters of 2013. In NCR, the PE investments were primarily in leased office assets.

By asset-class, office sector attracted highest PE investments at Rs 4,420 crore. Residential sectorwitnessed investments of close to Rs 4,180 crore while retail sector saw PE investments of Rs 300 crore.

Investor interest in the hospitality sector remained low with no investments in the segment recorded till September 2014.

Noida: Preferred destination for new realty projects

adler_group_noida

 

There is increased buoyancy in the market after the arrival of the new government, especially after the Budget has set the ball rolling for the real estate sector. With allocation of more funds for affordable housing, easing of FDI norms, implementation of REITs and special focus on infrastructure development, the government has made it clear that in order to push economic growth, a special focus on infrastructure and real estate development is pivotal. In the foreseeable future, the real estate market in Delhi NCR is going to see considerable forward momentum and Adler Group is very confidant about this.
As land is a prerequisite for any kind of development, Noida and Gurgaon are the logical answers to the burgeoning need for housing in Delhi NCR. In terms of inventory, Noida and Gurgaon have more options than any other city in the NCR. These two areas are consequently expanding and growing, and expansion opens opportunities for further growth in real estate. It is for this reason Adler Group believes  that these two cities now have mature real estate markets for different sets of buyers and investors.

However, they have very individual returns potential. In the last few years, it appears that investments made into properties located in Gurgaon have reaped better returns than those secured from properties in Noida. However, Noida is not lagging very far behind. Various recent announcements and the infrastructure uplifts of the city have made Noida’s real estate market increasingly attractive.

What favours investors entering Noida is the lower pricing factor, which now promises better appreciation and returns on investments. The realty market in Gurgaon has now crystallised into one most favourable for buyers in the premium segment. But the other side of the coin is that the high price points in Gurgaon suggest that properties there will no longer fetch high rates of appreciation.
With the fast-paced development in infrastructure in Noida and its vicinity, real estate growth has really picked up over the past few years. Adler Group has my clients from noida.

Analysis of Adler Group says that , With good infrastructure, metro connectivity and good road network, real estate development in the Noida regions is picking up rapidly. This is important, since infrastructure development is the primary draw for buyers and investors into this area. Upcoming major projects like the Export Promotion Zones and Taj Economic Zone along the Yamuna Expressway are likely to push the economic development of this region, consequently giving a further boost to real estate development. In fact, the positive response from buyers and investors in Noida has now made this the preferred destination for launching new projects and expediting existing ones. All in all, Noida is beginning to emerge as one of the brightest stars in Delhi NCR real estate.

For information on upcoming luxury projects pls contact :

email : info@adlergroup.in

mob : +919971170911

source : http://indianexpress.com/article/business/business-others/noida-preferred-destination-for-new-realty-projects/

 

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