The first three quarters of 2012 witnessed nearly 15 per cent year-on-year (YoY) decline in the quantum of private equity (PE) investments in the real estate sector as it recorded PE investments of Rs 35 billion.
According to real estate advisory firm, Cushman & Wakefield, the total number of PE transactions till date in 2012 is 23, which was lower when compared to same period last year.
In the first quarter, PE investments saw majority of the investments at Rs 21 billion while the remaining two quarters recorded Rs13.8 billion.
“While the second and third quarters show a drop in investment volumes, the real estate sector continues to attract steady investments during the year”, it said.
“The reason for the fall in number of deals was mainly due to a lot of concerns on the government policy front coupled with an uncertain investment scenario, valuation and continued focus on exits for some vintage funds”, Sanjay Dutt, Executive Managing Director(South Asia) for the company said.
Of the total Rs 35 billion invested, Mumbai continued to be the preferred destination for private equity investments followed by Bangalore and NCR.
He added that the residential segment witnessed the maximum PE investments with the share of deals of the total private equity investments increasing by 9 per cent in first three quarters of 2012.
Residential segment witnessed maximum PE investments at Rs 20.6 billion while office segment saw a fall in investment volume by 12 per cent.