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Home / Real Estate / India’s office sector received over $2.9 billion private equity in 2019: Report

India’s office sector received over $2.9 billion private equity in 2019: Report

The real estate sector in India, since 2011, has garnered equity investment of $22.7 billion across the office, retail and warehousing assets.

real-estate Updated: Mar 18, 2020 15:16 IST
HT Correspondent
HT Correspondent
Hindustan Times
The boost in the real estate sector is majorly driven by the demand from three segments — information technology, banking, financial services and insurance, and co-working.
The boost in the real estate sector is majorly driven by the demand from three segments — information technology, banking, financial services and insurance, and co-working.(Aniruddha Chowdhury/Mint)

The office sector in India received an investment of over $2.9 billion from private equity players in 2019, a recent report by Knight Frank said.

Four of the top six cities in India, barring Mumbai and NCR (national capital region), have single-digit vacancy levels in the office market. The boost is majorly by the demand from three segments — information technology, banking, financial services and insurance, and co-working.

There has been an acute supply crunch in Bengaluru and Pune markets which had a city-level vacancy of 4.8 per cent and 4.2 per cent respectively at the end of 2019, the report mentioned Chairman and Managing Director of Knight Frank India Shishir Baijal as saying.

For Mumbai and NCR, the vacancy levels may be higher at a city level. However, the vacancy levels are in single digits for Mumbai’s sought-after business districts of Bandra Kurla Complex (BKC) and Lower Parel and NCR’s Golf Course Extension Road and DLF Cybercity in Gurugram.

“The availability of vast talent in India in the fields of Science, Technology, Engineering and Mathematics (STEM) and the cost arbitrage makes India one of the most attractive office destinations for companies in the BFSI and IT sectors,” said Baijal.

He further added that most of the leading Indian markets have witnessed double-digit rent growth due to balanced demand-supply equilibrium. This has resulted in making investment premise all the more promising and the PE (private equity) investment of $13 billion is a testament to this.

The real estate sector in India, since 2011, has garnered equity investment of $22.7 billion across the office, retail and warehousing assets. From this, the Indian office assets received a maximum of 57 per cent share or $13 billion worth of these equity investments.

The Knight Frank India report said that in the six of the top eight Indian cities featured in the top 10 markets in terms of annual leasing transaction volumes in the Asia-Pacific (APAC) region. Some of the Indian cities have ranked higher than other cities in APAC region, Baijal said.

Bengaluru and Hyderabad with 15.3 million sq feet and 12.8 million sq feet featured at the second and third-largest office markets in the APAC region in terms of office leasing transactions.

Mumbai at 9.7 million sq feet and NCR at 8.6 million sq feet ranked fourth and fifth. These Indian cities were ranked higher than Beijing, Shanghai, Singapore, Jakarta, Kuala Lumpur and others in the APAC region.