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In 2022 PE investments in Indian real estate at $3.4 bn, at par with 2021: Savills

January 4, 2023: Private equity investments inflows into the Indian real estate sector stood at USD 3.4 billion (Rs 271 billion) at the end of 2022. This is at par with the investment quantum registered in 2021, according to the latest data by Savills India, a global property consulting firm. 

Source: RCA and Savills India Research

Data suggests that commercial office assets remained the frontrunner during 2022, garnering about half (45%) of the investment pie. Residential and retail sectors also witnessed robust growth, riding high on the end-user’s demand. This year marked the largest acquisition of an operational retail asset in India in the last 5 years and also one of the lowest residential inventory overhang in over a decade.

Persisting geopolitical challenges amid the ongoing Russia-Ukraine war, high global inflation, a fresh COVID outbreak and lockdown in China have slowed down the post-pandemic economic recovery across the globe. However, despite these global economic pressures PE investments in Indian real estate assets provided favourable avenues for both global and domestic institutional investors.

Private Equity Real Estate Investment India (USD mn)
Q1 2022Q2 2022Q3 2022Q4 202220222021Q4 2022 QOQ2022 YOY
1,0337043221,3663,4253,424324%0%

Source: Savills India Research

Savills India expects USD 3.5 billion – USD 4.0 billion of private equity investments in real estate in 2023. The manufacturing sector growth and digitisation of the economy is likely to drive investments in industrial and warehousing, data centres and life sciences segments. Savills India 

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estimates that India has the potential to create a demand of around 10 million sq. ft. every year for life sciences R&D lab spaces, till 2030. This could provide institutional investors with ample opportunity to increase allocations to the sector, especially in the development space.

“Commercial office remains the preferred investment product in India which absorbs around a third of the total APAC office demand by space. With the increase of office REITs, this trend will grow as domestic investor participation increases. Data centres have been the second most visible investment product in 2022. India remains a favourable destination for global real estate investors despite the global events and we will witness newer offshore capital enter India in 2023.” said Diwakar Rana, Managing Director, Capital Markets, Savills India.

Key Transactions – India

InvestorInvestee/AssetInvestment Quantum (USD Million)
HDFC Capital AdvisorsShapoorji Pallonji Real Estate192
Brookfield15-acres land parcel in Hitec City126
BlackstoneVertical Warehousing87

Source: Savills India Research

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