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PE Investment Into Indian Real Estate from Singapore Triples In Two Years: ANAROCK

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PE Investment Into Indian Real Estate from Singapore Triples In Two Years: ANAROCK
Team Outlook Money - 16 April 2019

New Delhi, April 16: Singapore investors are betting big on Indian commercial real estate and other new sunshine sectors, including logistics and warehousing. As per ANAROCK's recent report Private Equity in Indian Real Estate, of the total $14.01 billion private equity (PE) funds into Indian realty between 2015 to 2018, around one-third were pumped in by Singapore-based firms alone during the period – the highest among both domestic and foreign investors.

Major Singapore-based private equity firms are funnelling billions of dollars into the country's real estate sector, particularly in South Indian cities.

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, said Shobhit Agarwal, MD and CEO, ANAROCK Capital.

However, of the total PE inflow of $1.1 billion in Q1 2019, there were no investments from any of the Singapore-based PE investors such as GIC, Ascendas and Xander.

With 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 billion into Indian real estate. This saw a three-fold jump in 2017 and 2018 to nearly $3.5 billion.

Major players including GIC, Ascendas-Singbridge and Xander have been making steady investments into 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.

Over the past four years, GIC has invested close to $2.5 billion in Indian real estate, mainly in cities like Mumbai, Chennai, Bangalore, Hyderabad and NCR. For Ascendas, the preferred cities have largely been Hyderabad, followed by Chennai and MMR.

Meanwhile, US-based investors pumped in nearly $4 billion in the same period (2015 to 2018) and more than $700 million 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 billion across Indian cities over the last four years.

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