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Indian realty PE inflows: PE fund flows into real estate slow down in 2023


Private equity (PE) investments into Indian real estate fell 44% in 2023 as US and Canadian funds – which have been dominating PE fund flows into the sector in recent years – curbed investment activities amid geopolitical uncertainties and high interest rate environment globally.

Yet, increased interest among Asian investors – who accounted for over three-fourths of PE investments into the country’s real estate this year – along with the economy’s resilience keep the industry positive about private equity investment activities in the sector in the coming months.

The Indian real estate market received 44% lower PE investments of $3 billion, with a total 23 deals in 2023, data from property consultants Knight Frank India show.

Mumbai received the largest proportion of investments at $1.6 billion across sectors in 2023. The National Capital Region (NCR) and Bengaluru followed with $835 million and $347 million private equity inflows, respectively.

“We have also witnessed that there has been a rise in interest from Asian PE players in the recent past. This increased attention from Asians, particularly amid the impact on investments from western countries, could signal a positive shift for the Indian PE market,” said Shishir Baijal, chairman and MD, Knight Frank India.

According to him, as global challenges gradually subside, the Indian economy’s resilience and the favourable economics of real estate assets are expected to spark a resurgence in PE investment activities within the sector.Chanakya Chakravarti, a veteran PE real estate investor, said India is a diversification and future story that will scale up in the next two decades. As long as the market continues to evolve towards sustainability and governance in adherence to global standards, this opportunity will be chased by investors as is seen in the case of Asian investors investing here.”The decline in PE inflows this year is not a statement about the Indian property sector’s robustness, but about liquidity,” Chakravarti said. “Higher interest rates across the world, predominantly prompted by the US Fed’s decision to keep rates high to tame inflation post Covid, has had a domino effect across asset classes globally.”

This year, PE investors continued to prefer the office segment in India, owing to the resilience shown by high-quality assets, while the warehousing sector maintained its position as a growing favourite among investors.


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