Real estate PE funds switch focus on residential segment: JLL India

MUMBAI: Private equity firms’ fundraising and investment in real estate is witnessing rising focus on assets classes like residential segment, unlike the earlier modus operandi of raising diversified funds, according to property consultant JLL India.

"There has been a clear increase of focus among investors about where they want to invest their funds in. During 2007-08, investors left no stone unturned to participate in India’s economy and real estate growth story, and invested across all possible asset classes," said Anuj Puri, Chairman & Country Head, JLL India. "During the same period, 66 per cent of funds were diversified. The share of such funds has reduced to negligible levels, post-2014. In contrast, residential-focused funds have increased to 85 per cent today from the then measly figure of 14 per cent," he added.

According to Puri, these two trends show that the investment approach of investors has changed from weighing every asset class on the opportunity it presented to becoming residential-focused, as it has given maximum returns over the years.

From 2014, Indian real estate has witnessed private equity investments worth $2.2 billion and this is even before taking into consideration the platform level deals worth $2 billion. "When we compare the quantum of activities in last 18 months to investments between 2009 and 2013 that were worth $3.9 billion, this uptick is clearly evident. Per year investment has increased two times," JLL India said.