HYDERABAD: While the country has seen a drop in private equity (PE) investment in real estate, a report by Savills India — a global property consultancy firm — claims that it is set to bounce back by 60 per cent in 2021. However, experts and realtors from Hyderabad claim that the city did not see a plunge in investment even throughout the Covid-19 induced lockdown as 40 per cent of the new releases were ready - the highest in the country.
Private equity investment in real estate is expected to bounce back up to USD 6 billion, registering a 30 per cent year-on-year growth in 2021 on the back of an improving economic sentiment supported by policy reforms and growth in key emerging sectors, according to the latest report by Savills.
However, speaking to Express, G Rajashekhar Reddy, general secretary of Confederation of Real Estate Developers Association of India (CREDAI), Hyderabad, said, “Hyderabad has fortunately been able to avoid any major losses in terms of private equity investments as the year was peppered with new releases, amounting to almost 40 per cent of the new releases in the country. There, we have seen a healthy flow of investments, mostly in the commercial and office spaces sector.”
“However, the ongoing issue with LRS has dampened the market slightly. We are hoping that a quick and clear solution will restart the market again,” he added. “In our view, the investors will proceed with caution in the early days, but 2021 is likely to experience a fair amount of private equity investment owing to the inherent strengths and potential of alternate asset classes in real estate,” said Anurag Mathur, CEO, Savills India.
From 2000 to 2015, almost 60 per cent of private equity investment was in the residential segment until the focus of fund managers shifted to ready office assets supported by buoyant demand from 2014 onwards. The segment has attracted approximate 40 per cent of investments. Interestingly, the last two to three years have seen notable interest in newer asset classes such as student housing, data centres, warehousing and opportunistic assets.