The private equity investment in real estate is expected to bounce back to USD 6 billion, recording 30 percent year-on-year growth in 2021, with improving economic sentiment backed by policy reforms and development in key emerging sectors, as per Savills India report.

However, due to a downturn in economic activity, PE investment in real estate in 2020 is estimated to reach USD 4.6 billion. Warehouse leasing is expected to rise by 60 percent in 2021 compared to 2020.

The investors would proceed with caution in the early days. Still, due to the inherent strengths and potential of alternate real estate asset classes, 2021 is likely to experience a reasonable amount of PE investment.

Nearly 60 percent of PE investments were in the residential segment from 2000 to 2015, before fund managers attention moved to ready office assets. The segment attracted approximately 40 percent of the investment. Interestingly, notable interest in newer asset groups such as student accommodation, data centres, warehousing and opportunistic assets has been seen in the last 2-3 years, the report stated.

Although the leasing activity in the industrial and warehousing segment has decreased year-on-year, as quality supply is added to the stock, it is expected that rentals would see a steady increase.

By: Shailaja K