With total PE investments seeing a close to 27% yearly jump in H1 FY2022, investor confidence in Indian real estate is seen to be increasing. Foreign investors continued to remain major contributors with an approx. 63% share of the total inflows of USD 1790 Mn.
Though FY21 was an unprecedented year due to the pandemic, foreign PE funds showed much optimism for India. As much as 93% of the total PE investments pumped into Indian real estate was by foreign investors.
  • The commercial segment saw a total PE inflow of nearly USD 2.8 bn in 2018 – up from USD 2.20 bn in 2017
  • Office yields are 12-14% PA, rental yields for housing 2.5-3.5%
  • Residential revival depends on returning investor interest

 Anuj Puri, Chairman – ANAROCK Property Consultants

If the prolonged slowdown in the residential was not bad enough, to begin with, major policy overhauls over the last five years – DeMo, RERA, GST, amendments in the Benami Transactions Act etc. – literally paralysed the residential segment.

While any policy change brings with it some amount of teething pains, the residential segment took a prolonged hit because it had attracted the bulk of black money in the sector. Commercial real estate was far less affected, if at all.

Residential was also far less organized than the commercial office segment. Largely driven by IT/ITeS and BFSI sectors, the commercial real estate segment has been quite transparent and predictable – the primary criteria for foreign investors’ confidence.

Commercial Vs.

Commercial, warehousing the flavours of 2018; affordable housing’s continuing allure

Anuj Puri, Chairman – ANAROCK Property Consultants

Sluggish demand along with bleak returns on investment has dented the previously glowing charisma of Indian residential real estate in the preceding 2 to 3 years.

The cascading effect of demonetization, implementation of RERA and GST further dampened investment traction in this segment in 2017, leading to a decline in average prices between 5 to 7% during the period.

Although the tail-end of 2017 showed some signs of revival in the sector and there was an uptick in sales of ready-to-move-in properties, the multitude of existing challenges will continue to be felt in 2018.

The huge unsold inventory on the market and the possibility of distress sales in the offing will limit the possibilities of any significant price appreciation in near-term.

During the year 2017, PE investments into the residential asset class fell significantly and witnessed a loss of around 25% in overall share compared to the previous year. Also, for the first time in last three years, it lost its #1 position in PE investment share.