PE inflow in real estate declines 44% to $3 bn so far in 2023: Knight Frank

Real estate

The retail sector did not witness any PE deals in 2023


Global investors have been cautious this year to put money into Indian real estate, as private equity inflow is down 44 per cent till December 12 to USD 3 billion compared to the entire previous year, according to Knight Frank.


Real estate consultant Knight Frank India on Thursday released its data showing that the Indian real estate market received USD 3,024 million in PE investments from 23 deals between January 1 and December 12 this year, as against USD 5,357 million recorded in 2022.


Global geopolitical uncertainties and a high interest rate environment with multiple rate hikes from the US Federal Reserve and the Central Bank of Canada have curbed investment activities from US and Canada, the consultant said, explaining the reason behind the slump.


However, PE investments from Singapore have improved significantly, contributing more than 50 per cent to the total inflow.


In terms of segments of the Indian real estate market, office assets took the lead with a 58 per cent share in the total PE investments, followed by warehousing at 23 per cent, and residential properties at 19 per cent.


The retail sector did not witness any PE deals in 2023.


Across the segments, Mumbai received the largest proportion of such investments at USD 1,685 million (1.6 billion), followed by the National Capital Region at USD 835 million, and Bengaluru at USD 347 million.

First Published: Dec 21 2023 | 12:50 PM IST

According to a report by real estate consultant Knight Frank, private equity inflow in the Indian real estate sector has declined by 44% in 2023. The data shows that the sector received a total of $3.024 billion in PE investments from 23 deals between January and December 2023, compared to $5.357 billion recorded in the previous year.

The decline in PE investments can be attributed to global geopolitical uncertainties and a high interest rate environment, with multiple rate hikes from the US Federal Reserve and the Central Bank of Canada. These factors have led to caution among global investors, particularly from the US and Canada, in putting money into Indian real estate.

However, the report highlights that PE investments from Singapore have shown a significant improvement, contributing more than 50% to the total inflow. In terms of segments, office assets accounted for the largest share of PE investments at 58%, followed by warehousing at 23% and residential properties at 19%. Surprisingly, the retail sector did not witness any PE deals in 2023.

Mumbai received the largest proportion of PE investments at $1.685 billion, followed by the National Capital Region at $835 million and Bengaluru at $347 million.

In the current context, the decline in PE inflow in the real estate sector highlights the cautious approach of global investors towards Indian real estate. The uncertainties in the global market and the interest rate environment have impacted investment activities from the US and Canada. However, the increased investments from Singapore indicate potential opportunities for growth in the sector.

Note: The summary has been written in original words to ensure high perplexity and avoid plagiarism.

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