PE investment in real estate expected to grow 30% in 2021: Report

NEW DELHI: Private Equity investment in real estate can bounce back to USD 6 billion. It is expected to register a 30% year-on-year growth in 2021 on the back of an improving economic sentiment supported by policy reforms and growth in key emerging sectors. This analysis is according to a report by Savills India, a global property consultancy firm.

 Besides that, the PE investment in real estate in 2020 is expected to contract at USD 4.6 billion because of the drop-in economic activity. The report also says that warehouse leasing is expected to increase by 60% in 2021 as compared to 2020.

 Anurag Mathur, CEO, Savills India said that according to them, the investors will proceed with caution in the early days, but 2021 is likely to experience a fair amount of PE investment owing to inherent strengths and potential of alternate asset classes in real estate.

According to the reports, from 2000 to 2015 approximately 60% of PE investment was in residential real estate until the focus of fund managers shifted to ready office assets and the segment has pulled approximately 40% of the investment. Surprisingly the last 2-3 years have witnessed a significant interest in newer asset classes like student housing, data centers, warehousing, and opportunistic assets.

Diwakar Rana, managing director, Capital Markets, Savills India “While the leasing activity in the industrial and warehousing segment has declined year-on-year, we expect rentals to see a steady rise as quality supply gets added to the stock”.