PE inflows in real estate rise 62% in 2016 on favourable policy moves by govt

NEW DELHI: Private equity investments in real estate rose by 62% in 2016 to Rs 38,000 crore, against Rs 23,500 crore in 2015, as policy measures like real estate regulatory Act (RERA) and goods and services tax (GST) promised to make the sector transparent

Though the historic high of 2007 was not breached, last year proved to be the second-best year so far, according to a report by property consultancy JLL India.

Around Rs 13,500 crore of the total investment in 2016 was through the pure equity route, an increase of 29% from Rs 10,500 crore in 2015, while the rest came through different structures of debt.

“In 2016, equity investment was seen on a return journey to India. After the change in its regulatory framework, the country is now looking way more attractive to investors – both foreign and domestic – than ever before. Thanks to an improvement in India’s rankings on different indices and a pro-active government keen on improving these further, the country is bound to attract more equity investment,” said Shobhit Agarwal, Managing Director– Capital Markets & International Director, JLL India.

The July to September period of 2016 registered a 121% increase in private equity inflows to Rs 21,000 crore, agaist Rs 9,500 crore in the same period of 2015, due to increased confidence shown by investors post the Parliament’s passage of RERA and GST.

Agarwal feels 2017 may even turn out to be slightly better than 2016 – despite BREXIT and the outcome of US presidential elections – thanks to a strengthening and modernising economy and India’s growing reputation as an attractive investment destination.

“Economic and political stability, liberalisation of the FDI policy by the Modi government and the resultant improvement in the investor community’s sentiment are some of the factors working in Indian real estate’s favour,” he said.

(source by:-The Economic Times( ET REALITY) ) 

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