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INVESTMENT

MARKETBEAT
INDIA

Q2 2014

A Cushman & Wakefield Research Publication

PRIVATE EQUITY INVESTMENTS IN REAL ESTATE (PERE)

Total investment by private equity (PE) funds in the real


estate sector for the second quarter of 2014 was
approximately INR12.9 billion. Investments during the
quarter were restricted to the residential asset class.

Ten deals were recorded during the second quarter,


compared to 18 deals recorded in the previous quarter;
two deals were by international funds.

Despite a few large transactions taking place, average deal


size dropped 17% to INR1.29 billion per deal.

The total foreign direct investment (FDI) inflow in the


construction development sector for the first quarter of
2014 was noted at INR19.2 billion, an increase of 34%
from the previous quarter.

Contribution to the overall FDI by the construction


development sector was 4% in the first quarter of 2014,
within the range of 3-7% noted in 2013.

With relaxation in FDI norms in the latest budget


presented on July 10, the FDI inflow is expected to
increase substantially in the future.

Post the granting of taxation pass-through to REITs, its


rollout by the Security Exchange Board of India (SEBI) is
expected later this year.

INVESTMENT
MARKETBEAT

Q2 2014

MARKET SNAPSHOT
A Cushman & Wakefield Research Publication
ASSET-WISE AND CITY-WISE ANNOUNCED PERE

During the second quarter of 2014, Mumbai registered


the highest value of PE investments (INR6.7 billion) in
residential assets, followed by Delhi-NCR (INR2.4 billion)
and Chennai (INR2.0 billion).

Steady fundraising was witnessed in residential assets


which grew by 21%, and the average deal size increased
by 57%.

Whilst no transactions were recorded in the commercial


office assets during the quarter, a few big-ticket
transactions are in the pipeline.

This was a decline of 54% from the previous quarter,


which had witnessed copious level of investments.
Despite a quarterly decline, investment levels increased
more than 2.5 times on a year-on-year basis.

ANNOUNCED PE DEALS - ASSET-WISE (VALUE)

ANNOUNCED PERE DEALS - VALUE & NUMBER


35

25

20

30

20

INR Billion

20

10

15
10

INR Billion

15

25

15
10

5
5

5
0

Q2 11Q3 11Q4 11 Q1 12Q2 12Q3 12Q4 12Q1 13Q2 13Q3 13Q4 13Q1 14Q2 14

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14

FDI in Construction Development (INR bn)


Announced PE deals (INR bn)
Number of announced PERE deals (RHS)

Mixed Use

Residential

Office

Hospitality

Retail

Others

Source: Compiled by C&W research

Source: Compiled by C&W research

ANNOUNCED PE DEALS - CITYWISE (VALUE)

ANNOUNCED PE DEALS - CITYWISE (NO. OF DEALS)

25

8
7

No of Deals

INR Billion

20
15
10

6
5
4
3
2

1
0

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14

Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14
Mumbai

Delhi-NCR

Bengaluru

Pune

Mumbai

Others

Source: Compiled by C&W research

Delhi-NCR

Bengaluru

Pune

Others

Source: Compiled by C&W research

RECENT PERE DEALS


TARGET
Keystone Realtors (Rustomjee Developers)

ACQUIRER
Xander Group

PRODUCT MIX
Residential

CITY
Mumbai

QUANTUM (INR MIL)


3,700

Nirmal Lifestyle

Kotak Realty Fund

Residential

Mumbai

3,000

Ozone Group

The Blackstone Group

Residential

Chennai

1,750

Orris Developers

Religare Credit Opportunities Fund

Residential

Delhi-NCR

700

Source: Cushman & Wakefield Research

INVESTMENT
MARKETBEAT

Q2 2014

MARKET SNAPSHOT
A Cushman & Wakefield Research Publication

CORPORATE TRANSACTIONS IN REAL ESTATE SECTOR

Corporate transactions in the real estate sector for the


second quarter of 2014 were estimated at INR27.4
billion, recording a decline of 34% from the previous
quarter.

Domestic companies continued acquiring land


(development sites) and office assets required to execute
growth strategies. Total corporate transactions in the
first two quarters were valued at INR68.9 billion;
exceeding the entire 2013 level which was INR53.1
billion.

16
14

INR Billion

80

12
10

60

40

20

Q2 11Q3 11Q4 11Q1 12Q2 12Q3 12Q4 12Q1 13Q2 13Q3 13Q4 13Q1 14Q2 14
Total Value of Transactions

Total Number of Transactions (RHS)

Source: Cushman & Wakefield Research, Real Capital Analytics

The residential sector witnessed transactions worth


INR21.3 billion, which was nearly 80% of the overall
corporate investments. While approximately INR3.3
billion worth of corporate transactions was noted in
hospitality assets, about INR2.8 billion was in office
assets.

Mumbai witnessed the maximum corporate transactions


at INR20.8 billion during the quarter, followed by
Hyderabad (INR1.8 billion) and Chennai (INR1.5 billion).

90
80
70
60

INR Billion

18

100

Six institutional transactions were noted during second


quarter 2014, spread across residential (development
sites), office and hotel assets.

ANNOUNCED CORPORATE TRANSACTIONS CITYWISE (VALUE)

ANNOUNCED INSTITUTIONAL TRANSACTIONS VALUE & NUMBER


120

50
40
30
20

10
0
Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14
Mumbai

Delhi-NCR

Bengaluru

Pune

Others

Source: Cushman & Wakefield Research, Real Capital Analytics

RECENT CORPORATE TRANSACTIONS


TARGET
Clariant Chemicals Land Parcel

ACQUIRER
Lodha Developers

SECTOR
Residential

CITY
Mumbai

INVESTMENT (INR MIL)


11,540

New Great Eastern Mills

Peninsula Land Ltd

Residential

Mumbai

6,500

Samhi Hotels

Royal Orchid

Hospitality

Hyderabad

1,790

Source: Real Capital Analytics, Cushman & Wakefield Research

INVESTMENT
MARKETBEAT

Q2 2014

MARKET SNAPSHOT
A Cushman & Wakefield Research Publication

For more information about


C&W Research, contact:
Sigrid Zialcita
Managing Director, Research,
Asia Pacific
+(65) 6535 3232
sigrid.zialcita@ap.cushwake.com
Siddhart Goel
Director, Research Services,
India
+(91 22) 6657 5555
siddhart.goel@ap.cushwake.com
For more information about
C&W Capital Markets, please contact:
Manish Aggarwal
Executive Director,
India
+(91 124) 469 5555
manish.aggarwal@ap.cushwake.com
Diwakar Rana
Director, Capital Markets,
India
+(91 124) 469 5555
diwakar.rana@ap.cushwake.com

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