Construction Industry News
According to Knight Frank India, private equity investment in real estate fell 17% this year to USD 5.13 billion as investors became more cautious due to geopolitical and inflation concerns.
Compared to last year, investments in private equity (PE), both in the form of pure equity and in the form of loan capital, fell in the housing, office and retail sectors. However, it climbed in the warehouse asset sector.
According to Knight Frank data, PE investment in warehousing is up 45% this year, from USD 1,313 million to USD 1,907 million.
PE investment in office assets fell 19% this year to USD 2,331 million from USD 2,882 million in 2021.
Housing-related PE income fell 50% to USD 594 million in 2022 from USD 1,187 million in 2017.
PE investment in retail assets fell 63% this year to USD 303 million from USD 817 million in 2021.
From USD 6,199 million (USD 6.2 billion) in 2021, the total amount of PE investments has decreased to USD 5,134 million (USD 5.13 billion) this year.
Knight Frank India Chairman and Chief Executive Officer Shishir Baijal stated: “The investment climate in India eased in 2022 as investors became more cautious in response to escalating international tensions and concerns about rising inflation and interest rates.”
Despite these reservations, he argued that Indian real estate offered opportunities for both domestic and international investors.
With inflows of $2.33 billion this year, the office segment remained the most popular asset class, according to Baijal.
“The warehousing segment continued to see increasing interest from PE investors, supported by strong demand from manufacturing, e-commerce and third-party logistics users,” he said.
“With investors paying attention to the economy, government and regulatory environment, corporate results and valuations, investment in India is expected to improve,” he said.
According to Knight Frank, India's real estate sector attracted $54.8 billion in PE investment through 659 transactions between 2011 and 2022.
Apart from a decline in PE inflows due to the 2020 pandemic, PE investment in Indian real estate has remained strong over the past decade, averaging USD 4.6 billion annually from 2011 to 2022.
Among India's top eight markets, Mumbai received the most PE investment, accounting for 41% of total inflows, followed by Delhi-NCR (15% share) and Bengaluru (14% share) this year.
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