Singapore funds, over two years, comprise 41% share of total PE inflows into the Indian real estate sector at $3.5 bn (against $1.15 bn in 2015 and 2016 combined).
Chennai:
Major Singapore-based private equity firms are funnelling billions of dollars into the country’s real estate sector, particularly in South. As per Anarock’s recent report Private Equity in Indian Real Estate, of the total $14.01 bn PE funds into Indian realty between 2015 and 2018, approximately one-third were pumped in by Singapore-based firms alone during the period – the highest among both domestic and foreign investors.
However, of the total PE inflow of $1.1 bn in Q1 2019, there were no investments from any of the Singapore-based PE investors such as GIC, Ascendas and Xander. With funding from banks and NBFCs drying up over the last few years, Indian developers were being forced to explore debt and equity funding from various private equity players.
Singapore investors were on top of the list, followed by PE players from US and Canada. After establishing a strong base in China, India was their logical next destination of preference, Agarwal noted.
With their more patient and long-term outlook, Singapore-based investors and developers have gained a substantial foothold in India’s property market over the last four years.
In 2015 and 2016, Singapore-based PE players pumped $1.15 bn into Indian real estate. This saw a three-fold jump in 2017 and 2018 - to nearly $3.5 bn.
Major players, including GIC, Ascendas-Singbridge and Xander have been making steady investments in India. However, in recent years, they have scaled up their investments and developments across segments.
Besides commercial spaces including office and retail, players like Ascendas are also diversifying their portfolios and eyeing sunshine sectors like logistics and warehousing.
Investment inflows turn southward
Steady demand environment along with increased absorption of office space has prompted South region to gain momentum in 2018 with overall investments being tripled – from nearly $755 mn in 2017 to $2.24 bn in 2018. Bengaluru, Chennai and Hyderabad together comprised 54% overall share of PE inflows in 2018. While Mumbai in the West continued to be the most preferred city for investments with 38% of the total capital inflow, Hyderabad witnessed a sudden burst in investments in 2018, contributing more than half of investments received by southern India, Agarwal said.
With regard to Singapore-based investors over the past four years, GIC has invested close to $2.5 bn in the overall Indian real estate segment, mainly in cities like Mumbai, Chennai, Bangalore, Hyderabad and NCR. For Ascendas, the preferred cities have largely been Hyderabad, followed by Chennai and MMR. While US-based investors, led by Blackstone, have largely invested in west Indian markets (including Mumbai and Pune), Singapore-based investors focused on strengthening their foothold in South Indian markets of Bangalore, Hyderabad and Chennai.
As per Anarock data, Chennai saw a total PE inflow of $1.7 bn in the last four years out of which Singapore-based investors alone pumped in approx. $930 mn. Interestingly, Japanese conglomerate Mitsubishi Corp also invested nearly $25 mn in a residential project by Shriram Properties - Shriram Park 23 in Southern Chennai - in 2018. This equity investment marked Mitsubishi’s entry into the Indian real estate sector.
HYDERABAD: Hyderabad saw a total PE inflow of nearly $1.5 bn over the last four years (2015-2018). Of this total, nearly $875 mn came from Singapore-based PE investors, including Ascendas, Xander and GIC. Between 2017 and 2018, the overall PE funds from these companies touched over USD 750 mn. Out of all Singapore-based investors, Ascendas has shown maximum interest in Hyderabad, specifically in commercial real estate. GIC invested nearly $77 mn in 2015 in ICICI Venture’s Waverock project.
Increased office leasing activity in the last few years has positioned Hyderabad as one of the most active commercial markets in the South, backed by supportive government policies and strong political stability. The city also offers the lowest office rentals in comparison to top southern markets of Bengaluru and Chennai. So far, in Q1 2019, Hyderabad saw an investment of around $44 mn by UAE-based company Lakeshore into the city’s retail.
BENGALURU: Bengaluru saw nearly $420 mn pumped into its real estate sector in 2018 across commercial, logistics & warehousing, and retail. This was a 112% increase against the total PE inflows in 2015 when it was merely $197 mn. Collectively, in the last four years, the city has seen $1.13 bn inflow, including new emerging sectors like student housing and also affordable housing. For instance, Wall Street giant Goldman Sachs invested nearly $44 mn in a student housing project of Yoho – the student living business of Manipal Education and Medical Group. In Q1 2019, Bengaluru saw an inflow of $4 mn by Indospace group in Orris Infrastructure.
US-based investors pumped in nearly $4.0 bn in the same period (2015 to 2018) and more than $700 mn in the first three months of 2019. From the leading US-based private equity players including Blackstone, Goldman Sachs, Hines, Warburg Pincus and Proprium Capital, Blackstone alone infused nearly $2.9 bn across Indian cities over the last four years. PE players from Canada, led by Brookefield, were the third-largest investors into Indian real estate over the last four years, with PE infusions close to $2.3 bn. The other major PE player active in India is Canada-based pension fund CPPIB.
US and Canada-based PE investors come next with a collective contribution of $3.8 bn PE funds in the last two years, said Shobhit Agarwal, MD & CEO of Anarock Capital.
Singapore investors are betting big on Indian commercial real estate and other new sunshine sectors, including logistics and warehousing.
Major Singapore-based private equity firms are funnelling billions of dollars into the country’s real estate sector, particularly in South. As per Anarock’s recent report Private Equity in Indian Real Estate, of the total $14.01 bn PE funds into Indian realty between 2015 and 2018, approximately one-third were pumped in by Singapore-based firms alone during the period – the highest among both domestic and foreign investors.
However, of the total PE inflow of $1.1 bn in Q1 2019, there were no investments from any of the Singapore-based PE investors such as GIC, Ascendas and Xander. With funding from banks and NBFCs drying up over the last few years, Indian developers were being forced to explore debt and equity funding from various private equity players.
Singapore investors were on top of the list, followed by PE players from US and Canada. After establishing a strong base in China, India was their logical next destination of preference, Agarwal noted.
With their more patient and long-term outlook, Singapore-based investors and developers have gained a substantial foothold in India’s property market over the last four years.
In 2015 and 2016, Singapore-based PE players pumped $1.15 bn into Indian real estate. This saw a three-fold jump in 2017 and 2018 - to nearly $3.5 bn.
Major players, including GIC, Ascendas-Singbridge and Xander have been making steady investments in India. However, in recent years, they have scaled up their investments and developments across segments.
Besides commercial spaces including office and retail, players like Ascendas are also diversifying their portfolios and eyeing sunshine sectors like logistics and warehousing.
Investment inflows turn southward
Steady demand environment along with increased absorption of office space has prompted South region to gain momentum in 2018 with overall investments being tripled – from nearly $755 mn in 2017 to $2.24 bn in 2018. Bengaluru, Chennai and Hyderabad together comprised 54% overall share of PE inflows in 2018. While Mumbai in the West continued to be the most preferred city for investments with 38% of the total capital inflow, Hyderabad witnessed a sudden burst in investments in 2018, contributing more than half of investments received by southern India, Agarwal said.
With regard to Singapore-based investors over the past four years, GIC has invested close to $2.5 bn in the overall Indian real estate segment, mainly in cities like Mumbai, Chennai, Bangalore, Hyderabad and NCR. For Ascendas, the preferred cities have largely been Hyderabad, followed by Chennai and MMR. While US-based investors, led by Blackstone, have largely invested in west Indian markets (including Mumbai and Pune), Singapore-based investors focused on strengthening their foothold in South Indian markets of Bangalore, Hyderabad and Chennai.
As per Anarock data, Chennai saw a total PE inflow of $1.7 bn in the last four years out of which Singapore-based investors alone pumped in approx. $930 mn. Interestingly, Japanese conglomerate Mitsubishi Corp also invested nearly $25 mn in a residential project by Shriram Properties - Shriram Park 23 in Southern Chennai - in 2018. This equity investment marked Mitsubishi’s entry into the Indian real estate sector.
HYDERABAD: Hyderabad saw a total PE inflow of nearly $1.5 bn over the last four years (2015-2018). Of this total, nearly $875 mn came from Singapore-based PE investors, including Ascendas, Xander and GIC. Between 2017 and 2018, the overall PE funds from these companies touched over USD 750 mn. Out of all Singapore-based investors, Ascendas has shown maximum interest in Hyderabad, specifically in commercial real estate. GIC invested nearly $77 mn in 2015 in ICICI Venture’s Waverock project.
Increased office leasing activity in the last few years has positioned Hyderabad as one of the most active commercial markets in the South, backed by supportive government policies and strong political stability. The city also offers the lowest office rentals in comparison to top southern markets of Bengaluru and Chennai. So far, in Q1 2019, Hyderabad saw an investment of around $44 mn by UAE-based company Lakeshore into the city’s retail.
BENGALURU: Bengaluru saw nearly $420 mn pumped into its real estate sector in 2018 across commercial, logistics & warehousing, and retail. This was a 112% increase against the total PE inflows in 2015 when it was merely $197 mn. Collectively, in the last four years, the city has seen $1.13 bn inflow, including new emerging sectors like student housing and also affordable housing. For instance, Wall Street giant Goldman Sachs invested nearly $44 mn in a student housing project of Yoho – the student living business of Manipal Education and Medical Group. In Q1 2019, Bengaluru saw an inflow of $4 mn by Indospace group in Orris Infrastructure.
US-based investors pumped in nearly $4.0 bn in the same period (2015 to 2018) and more than $700 mn in the first three months of 2019. From the leading US-based private equity players including Blackstone, Goldman Sachs, Hines, Warburg Pincus and Proprium Capital, Blackstone alone infused nearly $2.9 bn across Indian cities over the last four years. PE players from Canada, led by Brookefield, were the third-largest investors into Indian real estate over the last four years, with PE infusions close to $2.3 bn. The other major PE player active in India is Canada-based pension fund CPPIB.