PE investments in Indian realty stood at USD 3.4 bln in 2022: Report

NEW DELHI: Investments into the Indian real estate sector by private equity firms stood at USD 3.4 billion at the end of 2022, data from property consulting firm Savills India showed. The quantum of investment last year -- 2022 -- was at par with the investment registered in 2021.

Savills India's data suggested that commercial office assets remained the frontrunner during 2022, garnering about half of the total investments. Residential and retail sectors also witnessed robust growth, though riding on the end-users' demand.

Despite persisting geopolitical challenges amid the ongoing Russia-Ukraine war, high global inflation, a fresh Covid outbreak and lockdown in neighbouring China, Indian real estate assets provided favourable avenues for both global and domestic institutional investors.

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

"Commercial office remains the preferred investment product in India which absorbs around a third of the total APAC (Asia-Pacific) office demand by space. With the increase of office REITs (Real estate investment trust), this trend will grow as domestic investor participation increases," said Diwakar Rana, Managing Director, Capital Markets, Savills India.

"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," added Rana. The growing digitalisation initiative backed by a strong government policy impetus has led to a surge in the demand for data centres (DCs).