PE investment in real estate sector grows by 36% annually during 2014-17

New Delhi: The private equity (PE) investment in Indian real estate sector grew by an average 36 percent annually to reach $8.6 billion in 2017 from $2.5 billion in 2014, according to property consultant Knight Frank.

“PE investments grew at a CAGR of around 36 percent from $2.5 billion (Rs 17,200 crore) in 2014 to $8.6 billion (Rs 59,100 crore) in 2017,” the consultant said in a statement.

The average investment per deal increased almost 2.5 times from $40 million (Rs 270 crore ) per deal in 2011 to $102 million (Rs 700 crore) per deal in 2017. Commenting on the report, Knight Frank India CMD Shishir Baijal said: “The real estate industry has been through a churn over the past few years due to a slew of structural reforms like demonetisation, GST, and RERA”. [caption id=“attachment_4201715” align=“alignleft” width=“380”]  Representational image. Reuters.[/caption] This had led to a reduction in investment risk perception coupled with the availability of matured assets resulting in a record Rs 57,300 crore worth of PE investments being witnessed in 2017 alone. “The investments which include platform deals and commitments have grown at a CAGR of 36 percent from 2014 to 2017. The exuberance continues in the current year with Rs 33,700 crores already being invested in the first half of 2018,” Baijal said. While office market has continued to remain strong, a closer look indicates that the once-overlooked segments of retail and warehouse have seen a renewed interest from global institutional investors, he added.