PE investments into India’s property sector slump 45% to USD477m in Q3

Data centres accounted for 34% of all investments during the quarter.

Private equity investment inflows into the Indian real estate sector declined 45% QoQ to USD 477 million (INR 35 billion) in the third quarter of 2021. According to Savills data, the investment inflow amounted to USD 3.3 billion (INR 233 billion) during January through September 2021, equivalent to almost half (49%) of the investment inflows that the sector witnessed in entire 2020. 

“The temporary slowdown in investment activity can be attributed to delayed decision-making by investors in the face of the pandemic. However, on the back of a successful vaccine administration programme, we expect business confidence to progressively gain momentum and the sector to start showing signs of recovery over the next six months.”

Here’s more from Savills:

Data centres garnered the highest share of about 34% in total private equity investments in Q3 2021. They have proven to be resilient despite the current pandemic in India. With the growing need for digital connectivity leading to a sharp rise in data usage, the demand for data centres, too, has soared. Improving technology infrastructure and increasing adoption of new technologies such as 5G, artificial intelligence, cloud computing, and Internet of Things are further pushing demand for this emerging asset class.

India witnessed its maiden investment by a global pension fund in life sciences R&D asset. Ivanhoé Cambridge and Lighthouse Canton jointly invested USD 100 million (INR 7.4 billion) in life sciences R&D facilities in Genome Valley, Hyderabad. India is an established pharma and life sciences innovation hub for global and domestic companies and the world’s largest vaccine manufacturing destination* characterised by a technically-sound talent pool and world-class R&D capabilities. We anticipate India to further cement its position in the global life sciences arena in the post-pandemic world, thereby presenting a lucrative opportunity for private equity investors focusing on life sciences R&D real estate.