Knight Frank presents a whitepaper on PE Investment

New Delhi, June 02, 2018: The lifeline of capital movement, Private Equity (PE) investments in India, saw a slowdown in FY18 following the staggering growth trajectory over the recent past. While overall PE investments dropped by 5% YOY, funds foraying into the real estate sector TABLE 1 PE Investment Trends (in USD bn) declined by significant 19% YOY during this period. Investments in sectors other than realty however, held steady.

Did Investments into Real Estate Actually Decline?

At one glance, the decline of 19% YOY in investments could reflect turbulence in the real estate sector. But when we delve deeper and dissect the flow of funds, it provides a different picture. During FY17, there have been several large ticket brownfield transactions particularly in commercial real estate covering office and retail assets (malls). For example, the USD 1.4 billion DLF-GIC deal and USD 1 billion Hiranandani-Brookfield deal which elevated the total investments for FY17. Such transactions do not happen often due to the sheer size of assets that are involved in the transactions, as those assets have a long gestation period and take more than a decade to mature and become operationally efficient. Hence, if we take a look at the investment numbers for these years excluding the major brownfield investments worth more than USD 500 million, the numbers were as follows: Read more

Corporate Comm India(CCI Newswire)