Let’s continue focus on PE investments in India, tracking progress. Experts at IKIA feels that the increase in PE investments in real estate is because global investors have put India back on their radar. The reasons – support from the Government and the maturity of real estate market.
Large institutional investors like GIC, Goldman Sachs and Warburg Pincus are trying to forge relationships with large developers who have a proven track record in different regions through entity or asset-level transactions. Until recently, Blackstone was the only serious bidder for large size realty transactions.
Why these PE investors have a strong hold, is due to their ability to invest long term – as long as 10 years, and the ability to ride short term volatility of the market, reaping benefits.
More recently, others such as Goldman Sachs, Brookfield, Piramal Fund Management and Warburg Pincus besides GIC have entered the arena. However, GIC has emerged as the top institutional investor in real estate.
India is looking attractive to global investors from the real estate perspective because valuations have leveled out, a sign of market maturing. And when valuations get institutionalized they are much easier to understand.