Private equity investment inflows into the Indian real estate sector amounted to USD 45 million (INR 3.7 billion) in Q1 2023, according to the latest report by Savills India.
The data indicates that commercial office assets remained the top performer in Q1 2023, capturing approximately 64% of the total investment. All the quarterly investments originated from foreign institutional investors and were focused on development office assets in Pune.
The report further suggests that, all investment activity came from foreign funds and was concentrated in the Western region of India, particularly Mumbai and Pune. Mumbai saw investments in ready industrial and warehousing assets, whereas Pune experienced investments in office assets.
The investment activity has been subdued due to growing global recession concerns, rising capital costs, and a mismatch in valuation expectations between sellers and investors, which have become significant hindrances to capital deployment in India. Furthermore, recent events in the global financial world, including the collapse of Silicon Valley Bank and the contagion spreading to other mid-market US banks, have contributed to the overall uncertainty in India's office leasing demand.
