CHENNAI: Chennai wooed $29 million of the total $2.7 billion (Rs 143 billion) private equity investment inflows into the Indian real estate sector during the first half of 2021, according to a report by Savills India, a global property consultancy firm.The inflow of $2.7 billion across India is equivalent to 41 per cent of the investment the sector saw in the entire year of 2020, an indication that investors’ confidence remains intact despite the pandemic-induced slowdown.
In the first half of 2020, private equity investment inflows across India stood at $870 million. However, in the second quarter of 2021, the Indian real estate market saw an investment of $865 million (Rs 63 billion), a 54 per cent decline from the previous quarter, the report says.Interestingly, during the first half of 2020, Chennai did not see any investment. It garnered $166 million of investments in the overall pie for 2020, and all this came in the second half of 2020, says the report.
A Shankar, chief operating officer, strategic consulting, Jones Lang LaSalle (JLL), says Chennai is a preferred destination by corporate occupiers due to the quality space it offers at competitive pricing. “While there was a slowdown due to the pandemic, now occupiers are better prepared and vaccine support for return-to-office will drive more investment-grade office space in Chennai,” he says.
Confederation of Real Estate Developers’ Association of India (CREDAI) Tamil Nadu president Suresh Krishn told Express investments could not surge during the second half in Chennai due to the pandemic. However, he is positive that in the next quarter there will be more private equity investments as the momentum of vaccination is rising. He says even in the first half of 2020, Chennai did not see any investment due to the pandemic.
Meanwhile, the Savills report said commercial office assets in India remained the frontrunner during the second quarter of 2021, garnering about 40 per cent of the investment pie. This is on the back of the resilience displayed by the investable grade office assets, reflected in the successful listing and operations of the three real estate investment trusts (REITs) in India.
While occupancy levels in Embassy Office Parks REIT and Mindspace Business Parks REIT declined marginally by 1-2 percentage points at the end of March 2021 as compared with those in December 2020, the rent remained stable during this period.