Private Equity in Real Estate (PERE) shows a strong preference for cities like Bangalore and Mumbai, while cities such as Chennai and Pune have also become appealing destinations for investors.
The IT sector in Bangalore has emerged as a significant attraction for PERE investors.
The southern and western regions of India are particularly favored by private equity investors engaging in real estate. An overwhelming majority of PERE investment converges on these key urban centers, with Bangalore and Mumbai leading the charge.
Last year, the cities of Bangalore, Chennai, Mumbai, and Pune collectively accumulated PERE investments totaling Rs.27,907 Cr, which accounts for a remarkable 84% of the overall investment landscape.
Reports suggest that the Delhi-NCR region ranks third in terms of PERE investments. However, experts challenge this claim, indicating that despite Jwala Real Estate and Indiabulls Infratech being registered in Delhi, their projects are located in Mumbai, implying that actual investment in the National Capital Region is mostly theoretical.
Blackstone stands out as the preeminent private equity investor in India, having deployed over $600 million in various real estate ventures. Notably, their investments have predominantly focused on southern and western markets, especially in Bangalore, alongside other contributions in Pune and select southern and eastern cities.
In Pune, Blackstone has directed approximately $153 million into the DLF-Akruti IT and SEZ project. Furthermore, the firm plans to collaborate with the Embassy group for three new commercial developments in both Pune and Bangalore.
The firm's latest ventures include a $200-million investment in the Manyata IT Park in Bangalore, along with an additional $80 million earmarked for the EON SEZ project in Pune.
A former executive from Blackstone commented on the strategic focus of PE investors, suggesting that urban centers are seen as prime locations for yielding better returns. He noted that while the North contains sizable areas, it lacks a comparable number of urban centers.
In the North, Delhi and NCR emerge as the two notable urban hubs. In contrast, the South and West regions boast a greater concentration of urban centers, leading to increased investments. Some experts argue that this disparity is largely due to the higher volume of investments in IT parks, as the South undoubtedly hosts a larger number of IT hubs in India.