Private equity investment in the Indian real estate sector is likely to recover and hit the $6 billion-mark next year, registering a year-on-year growth of 30 per cent, according to a report by Savills India.
The report noted that the growth may come on the back of an improving economic sentiment supported by policy reforms and growth in key emerging sectors.
It said that PE investment in real estate in 2020 is expected to contract at $4.6 billion due to decline in economic activity, adding that investors are likely to adapt themselves in the altered world order and steadily return to the market with evolved strategies.
“The next wave of investments will be driven by growth in warehousing, affordable housing and data centres apart from the commercial office segment which will continue to see steady improvement,” said the report titled Beyond The ‘20: Private Equity in Indian Real Estate’.
A likely repair of the bruised economy, improving trade relations, policy support and progress on the vaccination front, are the key factors that would drive the sentiment henceforth, it added.
A Savills India statement said that its estimates for private equity investment in the sector are based on factors like overall economic and infrastructure growth, growth in sectors such as manufacturing, logistics and e-commerce. Geopolitical scenario and policy enabling environment are also considered to be key determinants. As per the report, the warehousing and logistics segment has been among the most resilient asset classes in the ongoing pandemic. Warehouse leasing is expected to increase by 60 per cent in 2021 as compared to 2020, keeping investors riveted and on the lookout for investment opportunities.Savills Research also expects private equity investors to assess an opportunity of around $330 million in the industrial and warehousing segment in 2021.