PE investment in real estate to reach $3.4 billion in 2022: Report

The data shows that commercial office assets will continue to lead the way through 2022, accounting for almost half of the investment pie, or 45%. The residential and retail sectors also saw strong growth, riding high on end-user demand.

The year 2022 saw the largest acquisition of an operational retail property in India in the last five years and one of the lowest residential inventory in more than a decade.

Persistent geopolitical challenges amid the Russia-Ukraine war, high global inflation, a fresh COVID outbreak and a lockdown in China have slowed post-pandemic economic recovery around the world. However, despite these economic pressures, PE investment in Indian real estate properties provided favorable opportunities for both global and domestic institutional investors.

Savills India expects private equity investment of $3.5 billion to $4.0 billion in real estate in 2023. Growth in India’s manufacturing sector and digitization of the economy are likely to drive investments in the industrial and warehousing, data center and life sciences sectors.

It is estimated that India has the potential to generate around 10 million sq ft of demand every year for life science R&D labs by 2030. This can provide ample opportunities for institutional investors to increase allocation especially in the growth sector. ,

“Commercial office continues to be the preferred investment product in India absorbing almost a third of the total APAC office demand by space. With the growth of office REITs, this trend will accelerate as the participation of domestic investors increases. Data centers have been the second most visible investment product in 2022. Despite global events, India remains a favorable destination for global real estate investors and we will see new offshore capital inflows into India in 2023,” said Diwakar Rana, Managing Director, Capital Markets, Savills India.