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new Delhi: private equity investment Real estate fell 17 per cent this year to $5.13 billion as investors turned cautious amid geopolitical and inflation concerns. knight frank india,
Private equity (PE) investment, in both net equity and debt forms, declined in the housing, office and retail sectors during 2022, while it increased in storage properties compared to the previous year.
According to Knight Frank data, PE investment in warehousing grew 45 per cent this year to $1,907 million from $1,313 million last year.
In office property, PE investment declined by 19 per cent to USD 2,331 million this year from USD 2,882 million in 2021.
PE inflows in the housing segment to decline by 50 per cent to USD 594 million in 2022 from USD 1,187 million last year.
In retail property too, PE investment declined by 63 per cent to USD 303 million this year from USD 817 million in 2021.
Overall, PE investment is set to fall from US$6,199 million (US$6.2 billion) to US$5,134 million (US$5.13 billion) in 2021 this year.
Chairman and Managing Director of Knight Frank India Shishir Baijal “The investment climate in India softened in 2022, as investors turned more cautious in response to rising international tensions and concerns about rising inflation and interest rates,” it said.
Despite these concerns, he added that Indian real estate offers opportunities for both domestic and global investors.
Baijal said the office segment continued to be the most popular investment category with inflows of $2.33 billion this year.
“The warehousing segment is witnessing increased interest among PE investors, supported by strong demand from manufacturing, e-commerce and third party logistics occupiers,” he added.
On the outlook for next year, Baijal expects the pace of inflation and rate hikes to moderate for most countries.
“Investment in India is expected to improve as investors focus on the economy, government and regulatory framework, business results and valuations,” he added.
Knight Frank further pointed out that the Indian real estate sector has attracted PE investments worth USD 54.8 billion through 659 deals from 2011 to 2022.
In addition to a reduction in PE inflows during 2020 due to the pandemic, PE investment in Indian real estate remained strong over the past decade, with an average of US$ 4.6 billion per year from 2011 to 2022.
Among the top eight markets in India, Mumbai received the highest PE investment, accounting for 41 per cent of total inflows, followed by Delhi-NCR at 15 per cent and Bengaluru at 14 per cent during the year.
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