Pune's Real Estate Allure for Private Equity
Pune's real estate market has become increasingly attractive to private equity (PE) funds, largely due to its proximity to Mumbai, which simplifies market monitoring and investment tracking for these Mumbai-based funds. Pune's rapid growth, trailing only Mumbai, NCR, and Bangalore, further amplifies its appeal.
According to Sameer Gholve, Manager of Capital Markets at Jones Lang LaSalle India, "Pune has been favoured destination amongst Real Estate PE funds since 2005 – the year FDI opened for real estate."
PE Investment Trends in Pune
By December 2011, Pune had attracted approximately US$800 million in PE funds, encompassing both foreign and domestic investments across roughly 32 major transactions over the preceding five years. While 2009 witnessed a dip in PE investment, investor confidence rebounded strongly in 2010, leading to a significant recovery in deal closures.
Residential Sector Dominates
Residential real estate has consistently drawn the lion's share of PE investment in Pune. While investments in SEZs, industrial parks (STPIT), and mixed-use townships were prevalent before mid-2008, interest in these asset classes has waned since 2010. Residential projects continue to remain the key investment magnets within Pune’s real estate sector.
East Pune: A Hub for Investment
A significant 61% of PE investments in Pune have been concentrated in East Pune, driven by the area's booming IT industry. Developments such as Magarpatta Cyber City, EON IT Park, CommerZone, and Weikefield IT Park have fueled the demand for high-quality residential projects, attracting substantial PE investments. The increased spending power and aspirations of the workforce employed in these IT hubs have further stimulated growth, marked by the emergence of large malls and the consistent increase in demand for residential units within premium real estate developments.