According to a report from the property consultancy firm Cushman & Wakefield, private equity firms have invested a substantial Rs.700 Cr in the Delhi-NCR region. Interestingly, there has been minimal interest in Gurgaon from these investment firms.
In a broader context, back in 2012, private equity contributions to the Indian real estate sector amounted to Rs.19,000 Cr, with PE firms accounting for approximately one-third of total investments within that year. Cushman & Wakefield highlighted that in the fiscal year 2012-13, PE investments in India rose by seven percent, hitting over Rs.6200 Cr.
NCR realty received Rs.700 Cr from PE Firms.
Reports maintain that the Indian real estate market ranks amongst the premier investment destinations globally, securing the 20th position. Despite the increase in PE investments over the last year, the number of executed deals has markedly decreased. Surprisingly, this decline has not dampened the investment levels, as larger deals have still been registered in the Indian market.
Om Chaudhary, representing Fire Capital (also known as First Indian Real Estate), noted the increasing caution among PE investors towards diving into the real estate sector. His firm, based in Gurgaon and primarily focused on real estate, has engaged in a variety of projects, including residential developments, mixed-use spaces, and integrated urban villages.
PE firms invested Rs.700 Cr in NCR.
Chaudhary also expressed concerns regarding returns, stating they have fallen short of investor expectations, with profit margins increasingly tightening. Despite the overall rise in PE investments within the Delhi-NCR landscape, Gurgaon specifically has seen a steady decline in investor interest.
Nikhil Jain, CEO of Ramprastha Group, echoed similar sentiments, admitting that the Gurgaon market is no longer as enticing as it once was, describing it as quite sluggish.
Shifting trends within the investment landscape reveal that previously, PE firms would consider various project costs, including clearances and approvals, and would invest at the planning stage. Currently, however, these investments are contingent upon project readiness and firms are unwilling to factor in ancillary costs like approvals. It’s noteworthy that there remains a lack of specific data detailing the exact number of PE firms investing in Delhi-NCR.