Private equity interest in India real estate jumped in the second quarter, according to data compiled by Venture Intelligence. The firm tracked 15 deals in the quarter, compared to nine in the same period a year ago and 12 in the first quarter.
The deals included Warburg Pincus' $318 million investment in Oceanus Real Estate and US-based Blackstone Group's $30 million deal with Embassy Group in Bangalore. JP Morgan also invested $30 million in Parsvnath Developers.
Although a total amount was not available, 10 of the deals were worth a cumulative $504 million (Dh1.8 billion). Residential property accounted for 73 per cent of the deals, the firm reported.
The funds are focusing on projects near completion or companies already achieving sales volumes, the Economic Times reports.
"PE players are interested in last-mile construction funding more than pouring their money into greenfield projects, even if it means slightly lower returns," Om Chaudhary, chief executive of FIRE Capital Fund, told the Times. "As liquidity is tight, PE firms are cautious with their money."
The investments are counter to the latest trends in India property. As reported last week in the National, after a building boom and years of soaring prices, the market is in the midst of a correction.
More than 406,000 housing units are unsold in six major cities, according to research company Liases Foras. In Mumbai 107 million square feet of residential space is empty.
"Abnormally high" property rices are taking a toll, property experts say. In Mumbai the average price of a flat went 7.5 million rupees (Dh619,516) in Oct. 2006 to 21.8 million rupees this March.
Mumbai prices may drop as much as 35 per cent in the next two years, Liases Foras predicted in March.
Private equity funds targeting India property
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