Hyderabad office space attracts over Rs 1,000 cr PE investment in Q1 2021

Additionally, a joint Hyderabad-Chennai deal during the quarter attracted $415 million (about Rs 3,100 crore) involving office space assets across the two cities. The breakup of Hyderabad investment was not available.

Hyderabad: Hyderabad has attracted an equity investment of $143 million (over Rs 1,000 crore) with 1.8 million sq ft of office space transacted in the city during the first quarter (January-March) of 2021, shows latest report of Knight Frank India.

Additionally, a joint Hyderabad-Chennai deal during the quarter attracted $415 million (about Rs 3,100 crore) involving office space assets across the two cities. The breakup of Hyderabad investment was not available.

On the other hand, residential (debt + equity) real estate assets in Hyderabad have received investments worth $11 million (about Rs 80 crore) with two major deals during the quarter.

It is pertinent to note that Hyderabad has attracted $2,866 million (over Rs 21,000 crore) in private equity investment in office space with 16 deals since 2011, out of the total 87 deals attracted by the top cities of India. The city stands second in the country in the number of deals attracted during the period following Mumbai at the top with 22 deals.

Hyderabad also attracted investments to the tune of $197 million (over Rs 1,400 crore) with two deals in the retail sector since 2011.

National scenario

Knight Frank India, in its report ‘Investments in Real Estate-Trends in PE Investment (Q1 2021 update),’ showed that Indian real estate attracted private equity (debt + equity) investments of $3,241 million (about Rs 24,000 crore) across 19 deals in Q1 2021 (January – March) period. In the first quarter of 2021, the investment in the sector has grown by 16 times compared to $199 million (over Rs 1,400 crore) in Q1 2020.

The investments in Q1 2021 in value terms were about 80 per cent of that witnessed in full year 2020 and about 48 per cent of full year 2019. The strong momentum in Q1 2021 was driven by spill over of certain deals from 2020 and the rise in investor confidence due to the drop in Covid-19 infections during early parts of Q1 2021, which had created some ripples of positivity in the economy.

Of the total PE investments in real estate, the office segment attracted 71 per cent share, followed by retail at 15 per cent, residential and warehousing with seven per cent each, respectively.

Shishir Baijal, CMD, Knight Frank India said, “The deal street market of Indian real estate witnessed an impressive surge in both value and volume of private equity investments in the first quarter of 2021, when compared to the entire year of 2020.”

“Office assets continue to be the preferred segment attracting over 70 per cent of PE investments Q1 2021 as the segment moves towards maturity which includes sustained demand, stability in rental income and change in ownership profile over the long -term,” added Baijal.

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