Private Equity Investment to grow in Delhi-NCR real estate market

Date : May 15, 2014

In view of a stable government in centre, the Private Equity (PE) investment in the real estate market of Delhi-NCR is expected to go up by around 50 per cent. The realty expert opined, that investment in the realty sector has been sluggish, however the segment is expecting huge surge in post election scenario.

Rohit Raj Modi, officiating president, CREDAI (NCR chapter) said, "NCR is amongst the top choice for real estate PE funds. If we look at latest Cushman and Wakefield report,  

Indian realty sector has recorded an increase of 28 per cent compared to the previous quarter and 2.5 times the equity investment in first quarter of 2013.

" On Delhi-NCR region, the Executive Director, Ashiana Homes further added, "As for Delhi NCR, the area has already attracted PE investment of Rs 80 crore in first quarter of 2014. PE funding has picked up in last one year due to attractive valuations and low level of bank funding to the sector."

Anshuman Magazine, CMD, CBRE South Asia Private Limited said, "The investment sentiment of most institutional investors (PE falls under Institutional Investment) about the NCR continues to remain upbeat.

The NCR-especially Gurgaon and Noida-has always been one of the strongest residential markets for India, driven by affordable pricing and a multitude of product offerings that are available for buyers."

Magazine went on to add that the Delhi-NCR will continue to see increased investments into housing due to the strong demand drive in the region, coupled with the fact that Delhi as a metropolitan city does not create any significant housing supply in the mid-market segment, leading to a spill-over of such demand into the peripheral locations of Noida and Gurgaon.
 

Elaborating on the current status of the PE funds in current realty market in Delhi-NCR; Mohit Arora, MD, Supertech said, "In current market scenario, the PE funds are around 10 per cent of the net real estate market liquidity in Delhi-NCR. In post election scenario, we are expecting around 50 to 60 per cent growth in one year, provided that there is a stable government."

He said that it takes around six to 12 month for a government to show its stability. However, Arora was of the opinion that PE investors would prefer to invest in markets like Mumbai, Pune and down south locations and the above mentioned area is expected to attract almost double of the current PE funds in their market.

"The south IndianBSE -1.42 % real estate market along with Mumbai and Pune would register around 100 per cent growth or more than that because these markets are end users driven while in northern India, the market is mainly driven by the investors," said Arora of Supertech.
 

Ajay Aggarwal, MD, Microtech Infrastructures said, "PE investment scenario has been in tune with the subdued economy in last one year. This is only recently that it has picked up in the hope of a stable and growth-friendly government."

Mohit Goel, CEO, OmaxeBSE -1.24 % said, "NCR received an investment of Rs 1650 crore in 2013, which is almost more than double of last year's PE investment." He said that PE investment is more guided by an anticipation of profit than anything else. With some slowdown in real estate activity and the possibility of the next government driving the economy out of this is a reason why PEs are positive for India.
 

Standing in sync with Mohit Goel; Siddharth Agarwal, dorector, Satya Group said, "Noida and Gurgaon would be the major beneficiary of the PE investments in Delhi-NCR. However tier-2 cities are also not laggards in this regard." He opined that tier-2 location are expected to give better returns as their prices are low and in any push in prices, they are expected to surge faster.

Asked about major pockets of PE investment Rattan Hawelia, founder-chairman, Hawelia Group said, "Actually, whole of Delhi-NCR has immense potential to attract PE investment but I believe developing regions like, Noida, Greater Noida West, Yamuna Expressway, Bhiwadi etc in particular have edge in comparisons to other regions."

Citing different land acquisition laws in UP and Haryana Kamal Dutta, MD, DPL Group said, "Locations falling in Uttar Pradesh has better chances to attract PE investment in comparison to the realty projects falling in Haryana."

He said that major pockets for PE investment of NCR falling in UP will be Noida, Greater Noida (west) Yamuna expressway and Ghaziabad all are in Uttar Pradesh and some region in Haryana has major potentiality for PE investment.

However, AK Tulsiani, CMD of Tulsiani Constructions and Developers said, "Gurgaon, Sohna Road and Noida would be the preferred area for the PE investors in Delhi-NCR."

He further said that formation of a stable government certainly has a positive impact in helping the revival of the overall sentiment of the real estate sector. The matter of fact that, only housing sector at this moment has the capability to turn around the weak macro-economic sentiments and revive demand.

Source And Courtsey By :- http://economictimes.indiatimes.com/news/emerging-businesses/regional-hubs/north/private-equity-investment-to-grow-in-delhi-ncr-realestate-market/articleshow/35155755.cms