PE inflow in real estate declines 44% to $3 bn so far in 2023: Knight Frank

Global investors have been cautious this year to put money into Indian real estate, as private equity inflow is down 44 per cent till December 12 to USD 3 billion compared to the entire previous year, according to Knight Frank.

Real estate consultant Knight Frank India on Thursday released its data showing that the Indian real estate market received USD 3,024 million in PE investments from 23 deals between January 1 and December 12 this year, as against USD 5,357 million recorded in 2022.

Global geopolitical uncertainties and a high interest rate environment with multiple rate hikes from the US Federal Reserve and the Central Bank of Canada have curbed investment activities from US and Canada, the consultant said, explaining the reason behind the slump.

However, PE investments from Singapore have improved significantly, contributing more than 50 per cent to the total inflow.

In terms of segments of the Indian real estate market, office assets took the lead with a 58 per cent share in the total PE investments, followed by warehousing at 23 per cent, and residential properties at 19 per cent.

The retail sector did not witness any PE deals in 2023.

Across the segments, Mumbai received the largest proportion of such investments at USD 1,685 million (1.6 billion), followed by the National Capital Region at USD 835 million, and Bengaluru at USD 347 million.