The inflow of Private Equity Funds appears to be consistent and has reached an all-time high during the 3rd quarter of 2018 for the first time around these 11 years. This is due to the volume of institutional investments rising by 9% in the 3 quarters of this year in comparison to the previous year.
A recent data by a globally renowned Real Estate company showed the institutional investments amounting to 37,815 crore rupees indicating the increasing level of confidence in the investors to invest in the country’s Real Estate sector.
The major portion of the investment amounting to 7,140 crores, was contributed by the class of office asset under the commercial segment. This suggests that the Indian commercial sector continues to interest the institutional investors.
The volume of investments in the office sector has multiplied by 1.3 times in 2018 from that in the corresponding period of the previous year. The number of transactions to follow up this year will reach new heights towards the end of 2018 thereby, making a new mark.
The retail sector is also experiencing a strong growth as is evident from the rates of mall vacancy going down. The interest to invest in this sector is no less than that in the office spaces.
The NBFC and domestic routes have resulted in higher PE inflows into the residential sector, as well. But the liquidity crisis of HFCs and NBFCs in recent times has become a matter of concern for the developers. The flow of cash from MFs and banks have slowed down already. But this is more of a boon than a hindrance for the realty sector.
The reduced supply of cash to the developers is anticipated to correct the prices of high ticket residential units faster, which in turn will take the Indian Real Estate a way forward through quick consolidation process.
Hyderabad became the most prominent in the eyes of the institutional investors out of the major property markets in the country. The city accounted for 60% of the total amount of investment inflow during the third quarter of this year followed by Mumbai. Mumbai contributed 22% of the total amount.
The operational assets such as hotels are being eyed too by the investors, which is favourable for the industry.
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