Policy transformation has made India an attractive investment avenue
Realty+ in conversation withKishanLal Agrawal, Director, Worldwide Insurance Brokers Ltd., understands the reason for surging PE investments in real estate.
What is the reason for the surge in PE investments?
Lower investment risk perception and continually growing demand are the two factors any investment firm would consider before making an investment decision. After the recent reforms such as RERA and GST, Real Estate as an asset class has become much more attractive investment avenue for the Private Equity (PE) firms. These structural reforms have come a long way in making the real estate sector more transparent and process driven besides increasing buyers’ trust. Now that there is no place for fly-by-night operators in the market and the perennial malpractices have also been curtailed, there is obviously a risk free environment for the PE Firms. Hence PE investments in the real estate sector have surged significantly.
Which sector of real estate is attracting the most investments?
Commercial and office segment is witnessing the highest inflows of PE investments. Especially the Grade-A commercial and office spaces are much in demand, hence, Private Equity majors are steadily increasing their portfolio of such projects.
What are PE firms looking at in India – project level investments or entity level?
The institutional investors have showcased their renewed optimism towards entity-level investments since the real estate sector is currently facing a cash-crunch scenario and most of the projects require long-term investment commitment.