Private equity real estate investments in India totaled approximately INR269 billion ($5.6 billion; €4.1 billion), according to a study by commercial real estate services firm Cushman & Wakefield of 79 deals done over the last year.
The most popular asset class was residential which netted 41 percent of private equity real estate investments in the country. Townships drew 21 percent of the investments and offices followed with 10 percent.
The report also noted that a rising number of real estate investment deals were being done through India-specific real estate funds, rather than through Foreign Direct Investment (FDI), which exposes foreign investors to increased scrutiny and tighter regulations.
In recent times India has seen large capital inflows into its real estate sector, which has led to concerns about the creation of a price bubble in the sector. As a result, a number of private equity funds focused on the real estate and related sectors are awaiting approvals from the Securities and Exchange Board of India (SEBI) to commence operations.
However, a good sum of FDI inflow goes into the real estate sector and about 50 percent of 2007’s FDI inflows have been accrued during the first two months of 2008’s second quarter, which is a positive indication of investor confidence, the report said.