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1、Investments in Real Estateknightfrank.co.in/research2023Trends in Private Equity Investment in India:2023ForewordShishir Baijal Chairman and Managing DirectorThe Indian real estate investment landscape in 2023 navigated significant global uncertainties and evolving market dynamics.Investor caution p

2、revailed due to geopolitical tensions,rising interest rates,and economic uncertainties.Despite challenges,opportunities emerged in quality assets for long-term investment.The rise of private credit offered flexible financing opportunities,hastening project completion and fostering market liquidity.P

3、rivate equity investments totalling USD 3.0 bn in 2023 across office,warehousing,retail,and residential segments showcased a cautious approach by investors.The office sector emerged as the top performer,driven by limited but substantial transactions,while the warehousing sector maintained its status

4、 as an emerging choice among investors.The outlook for the medium term remains promising with a strong domestic economy,record infrastructure investments,with subsiding challenges on global monetary policies that will play a key role in capital flows into the Indian real estate sector.The Knight Fra

5、nk India Capital Market Report provides comprehensive insights into institutional private equity investments in the Indian real estate sector,covering overall inflows,key statistics,major trends,and enduring themes expected to sustain in the foreseeable future.Additionally,the credit space is captur

6、ed in this version for a better understanding of the wider fund access for the sector.We hope that the report proves valuable to you and contributes to your understanding of the Indian real estate investment landscape.We welcome your feedback and wish you and your loved ones safe and healthy times a

7、head.ContentsPage no.030 10 20 30 40 5Page no.04Page no.06ForewordIntroduction to Private Credit in IndiaPrivate Credit in Indian Real Estatewww.knightfrank.co.in/researchMumbai HOKnight Frank(India)Pvt.Ltd.Paville House,Near Twin Towers,Off.Veer Savarkar Marg,Prabhadevi,Mumbai 400 025,IndiaTel:022

8、6745 0101/4928 0101AhmedabadKnight Frank(India)Pvt.Ltd.Unit Nos.407&408,Block C,The First,Behind Keshav Baugh,Party Plot,Vastrapur,Ahmedabad 380 015,IndiaTel:079 4894 0259/4038 0259BangaloreKnight Frank(India)Pvt.Ltd.204&205,2nd Floor,Embassy Square,#148 Infantry Road,Bangalore 560 001,IndiaTel:080

9、4073 2600/2238 5515ChennaiKnight Frank(India)Pvt.Ltd.1st Floor,Centre block,Sunny Side,8/17,Shafee Mohammed Road,Nungambakkam,Chennai 600 006,IndiaTel:044 4296 9000GurgaonKnight Frank(India)Pvt.Ltd.1505-1508,15th Floor,Tower B,Signature Towers South City 1,Gurgaon 122 001,IndiaTel:0124 4782700Hydera

10、badKnight Frank(India)Pvt.Ltd.Western Dallas Centre,5th floor,Office#3,Hyderabad Knowledge City,Survey No.83/1,Raidurg,Serilingampally Mandal,Ranga Reddy District,Telangana,Hyderabad,500032,IndiaTel:040 44554141KolkataKnight Frank(India)Pvt.Ltd.PS Srijan Corporate Park Unit Number 1202A,12th Floor,B

11、lock EP&GP,Plot Number-GP 2,Sector V,Salt Lake,Kolkata 700 091,IndiaTel:033 6652 1000PuneKnight Frank(India)Pvt.Ltd.Unit No.701,Level 7,Pentagon Towers P4,Magarpatta City,Hadapsar,Pune 411 013,IndiaTel:020 6749 1500/3018 8500Page no.26Outlook and Conclusion Overview of Private Credit Deals Trends in

12、 Private Credit Deals in Indian Real EstatePage no.13Private Equity Investment in Real Estate Sector Office Sector Investments Warehousing Sector Investments Residential Sector Investments Retail Sector InvestmentsForewordShishir Baijal Chairman and Managing DirectorThe Indian real estate investment

13、 landscape in 2023 navigated significant global uncertainties and evolving market dynamics.Investor caution prevailed due to geopolitical tensions,rising interest rates,and economic uncertainties.Despite challenges,opportunities emerged in quality assets for long-term investment.The rise of private

14、credit offered flexible financing opportunities,hastening project completion and fostering market liquidity.Private equity investments totalling USD 3.0 bn in 2023 across office,warehousing,retail,and residential segments showcased a cautious approach by investors.The office sector emerged as the to

15、p performer,driven by limited but substantial transactions,while the warehousing sector maintained its status as an emerging choice among investors.The outlook for the medium term remains promising with a strong domestic economy,record infrastructure investments,with subsiding challenges on global m

16、onetary policies that will play a key role in capital flows into the Indian real estate sector.The Knight Frank India Capital Market Report provides comprehensive insights into institutional private equity investments in the Indian real estate sector,covering overall inflows,key statistics,major tre

17、nds,and enduring themes expected to sustain in the foreseeable future.Additionally,the credit space is captured in this version for a better understanding of the wider fund access for the sector.We hope that the report proves valuable to you and contributes to your understanding of the Indian real e

18、state investment landscape.We welcome your feedback and wish you and your loved ones safe and healthy times ahead.ContentsPage no.030 10 20 30 40 5Page no.04Page no.06ForewordIntroduction to Private Credit in IndiaPrivate Credit in Indian Real Estatewww.knightfrank.co.in/researchMumbai HOKnight Fran

19、k(India)Pvt.Ltd.Paville House,Near Twin Towers,Off.Veer Savarkar Marg,Prabhadevi,Mumbai 400 025,IndiaTel:022 6745 0101/4928 0101AhmedabadKnight Frank(India)Pvt.Ltd.Unit Nos.407&408,Block C,The First,Behind Keshav Baugh,Party Plot,Vastrapur,Ahmedabad 380 015,IndiaTel:079 4894 0259/4038 0259BangaloreK

20、night Frank(India)Pvt.Ltd.204&205,2nd Floor,Embassy Square,#148 Infantry Road,Bangalore 560 001,IndiaTel:080 4073 2600/2238 5515ChennaiKnight Frank(India)Pvt.Ltd.1st Floor,Centre block,Sunny Side,8/17,Shafee Mohammed Road,Nungambakkam,Chennai 600 006,IndiaTel:044 4296 9000GurgaonKnight Frank(India)P

21、vt.Ltd.1505-1508,15th Floor,Tower B,Signature Towers South City 1,Gurgaon 122 001,IndiaTel:0124 4782700HyderabadKnight Frank(India)Pvt.Ltd.Western Dallas Centre,5th floor,Office#3,Hyderabad Knowledge City,Survey No.83/1,Raidurg,Serilingampally Mandal,Ranga Reddy District,Telangana,Hyderabad,500032,I

22、ndiaTel:040 44554141KolkataKnight Frank(India)Pvt.Ltd.PS Srijan Corporate Park Unit Number 1202A,12th Floor,Block EP&GP,Plot Number-GP 2,Sector V,Salt Lake,Kolkata 700 091,IndiaTel:033 6652 1000PuneKnight Frank(India)Pvt.Ltd.Unit No.701,Level 7,Pentagon Towers P4,Magarpatta City,Hadapsar,Pune 411 01

23、3,IndiaTel:020 6749 1500/3018 8500Page no.26Outlook and Conclusion Overview of Private Credit Deals Trends in Private Credit Deals in Indian Real EstatePage no.13Private Equity Investment in Real Estate Sector Office Sector Investments Warehousing Sector Investments Residential Sector Investments Re

24、tail Sector InvestmentsSurge in Real Estate Credit driving growth in Residential and Commercial sectorsGROWTH IN HOUSING AND COMMERCIAL LOANS CRE Loan GrowthTotal Credit Growth0%5%10%15%20%25%30%Mar 12Mar 13Mar 14Mar 15Mar 16Mar 17Mar 18Mar 19Mar 20Mar 21Mar 22Mar 2312%22%9%6%4%0%9%14%26%1%8%2%21%18

25、%17%18%15%13%19%15%12%13%15%14%Housing Loan GrowthSource:RBI StatisticsSHARE OF COMMERCIAL AND HOUSING SECTOR AS A%OF TOTAL LOANSCRE Share in total LoansHousing Share in total Loans0%2%4%6%8%10%12%14%16%Mar 13Mar 14Mar 15Mar 16Mar 17Mar 18Mar 19Mar 20Mar 21Mar 22Mar 233%3%3%3%3%2%2%2%3%2%2%9%10%10%1

26、1%12%13%13%14%14%14%14%Source:RBI StatisticsBetween 2013 and 2023,the total credit extended by Indian banks surged by 175%to reach INR 136,752 bn.Remarkably,credit allocated to housing(including Priority Sector Housing)escalated by 324%to INR 19,364 bn,while loans disbursed for commercial real estat

27、e rose by 150%to INR 3,146 bn.Multiple factors have contributed to this surge in credit.The growth of the Indian economy,augmenting disposable incomes,and an increasing demand for both commercial and residential real estate,stand out as primary reasons.Another pivotal factor influencing the rise in

28、credit to the real estate sector is the governments emphasis on infrastructure development and the creation of smart cities.Substantial government investments in infrastructure projects like roads,railways,and airports have bolstered demand for commercial real estate.Additionally,the governments pro

29、motion of housing policies has facilitated easier access to homeownership,thereby driving the demand for housing loans.In recent years,the Indian real estate sector has experienced a notable surge in credit,as indicated by the data from the Reserve Bank of India(RBI).Specifically,the proportion of r

30、esidential housing loans in the overall credit extended by Indian banks rose from 9.2%in 2013 to 14.2%by March 2023.Throughout this period,the allocation of loans toward commercial real estate(CRE)consistently ranged between 2.3%and 2.9%of the total loans disbursed.The collective exposure of the ban

31、king system to the real estate sector has grown from 11.7%in 2013 to 16.5%in 2023.Notably,these loans are typically secured,and their adherence to loan-to-value(LTV)ratio regulations has contributed to curtailment of loan defaults at less than 2%over the same timeframe.5INVESTMENTS IN REAL ESTATETRE

32、NDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20234INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202313%14%8%9%7%8%12%7%17%10%15%16%Surge in Real Estate Credit driving growth in Residential and Commercial sectorsGROWTH IN HOUSING AND COMMERCIAL LOANS CRE Loan GrowthTotal Credi

33、t Growth0%5%10%15%20%25%30%Mar 12Mar 13Mar 14Mar 15Mar 16Mar 17Mar 18Mar 19Mar 20Mar 21Mar 22Mar 2312%22%9%6%4%0%9%14%26%1%8%2%21%18%17%18%15%13%19%15%12%13%15%14%Housing Loan GrowthSource:RBI StatisticsSHARE OF COMMERCIAL AND HOUSING SECTOR AS A%OF TOTAL LOANSCRE Share in total LoansHousing Share i

34、n total Loans0%2%4%6%8%10%12%14%16%Mar 13Mar 14Mar 15Mar 16Mar 17Mar 18Mar 19Mar 20Mar 21Mar 22Mar 233%3%3%3%3%2%2%2%3%2%2%9%10%10%11%12%13%13%14%14%14%14%Source:RBI StatisticsBetween 2013 and 2023,the total credit extended by Indian banks surged by 175%to reach INR 136,752 bn.Remarkably,credit allo

35、cated to housing(including Priority Sector Housing)escalated by 324%to INR 19,364 bn,while loans disbursed for commercial real estate rose by 150%to INR 3,146 bn.Multiple factors have contributed to this surge in credit.The growth of the Indian economy,augmenting disposable incomes,and an increasing

36、 demand for both commercial and residential real estate,stand out as primary reasons.Another pivotal factor influencing the rise in credit to the real estate sector is the governments emphasis on infrastructure development and the creation of smart cities.Substantial government investments in infras

37、tructure projects like roads,railways,and airports have bolstered demand for commercial real estate.Additionally,the governments promotion of housing policies has facilitated easier access to homeownership,thereby driving the demand for housing loans.In recent years,the Indian real estate sector has

38、 experienced a notable surge in credit,as indicated by the data from the Reserve Bank of India(RBI).Specifically,the proportion of residential housing loans in the overall credit extended by Indian banks rose from 9.2%in 2013 to 14.2%by March 2023.Throughout this period,the allocation of loans towar

39、d commercial real estate(CRE)consistently ranged between 2.3%and 2.9%of the total loans disbursed.The collective exposure of the banking system to the real estate sector has grown from 11.7%in 2013 to 16.5%in 2023.Notably,these loans are typically secured,and their adherence to loan-to-value(LTV)rat

40、io regulations has contributed to curtailment of loan defaults at less than 2%over the same timeframe.5INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20234INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202313%14%8%9%7%8%12%7%17%10%15%16%TOTAL NUMBER

41、OF AIFs INCREASED 10 x SINCE ITS INTRODUCTIONNo of AIFs IssuedSource:RBI Statistics42 101 135 143 209 302 414 547 641 732 885 1,088 -200 400 600 800 1,000 1,200Mar-12Mar-13Mar-14Mar-15Mar-16Mar-17Mar-18Mar-19Mar-20Mar-21Mar-22Mar-23Rise of Private Credit:Alternate Investment FundsIndias real estate

42、sector presently contributes 7.3%to the countrys GDP and is anticipated to double by 2047,thereby creating a wide variety of funding needs to support this projected growth.While the credit flow from the banking and NBFC segment has been robust,the lending terms are restrictive for business developer

43、s seeking opportunities for growth.Alternative Investment Funds(AIFs)address this need by providing developers with alternative capital sources,enabling them to fund projects with flexible terms and achieve their growth targets.AIFs present developers with a broader spectrum of financing choices com

44、pared to traditional banks.This flexibility allows developers to structure financing according to their specific requirements and risk tolerance.These funds cater to a diverse pool of investors,including High Net Worth Individuals(HNIs),institutional investors,and Non-Resident Indians(NRIs).By offer

45、ing various risk-return profiles,AIFs attract investments from individuals and institutions looking to participate in Indias real estate market growth.Regulated by the Securities and Exchange Board of India(SEBI),AIFs operate within a regulatory framework ensuring transparency and investor protectio

46、n.This regulatory supervision fosters trust and confidence in the AIF market,drawing more investors and fostering long-term growth of the sector.Rise of Private Credit in Indian Real Estate:Fuelling growth and bridging gapsThe Indian real estate sector post pandemic has shown remarkable resilience,d

47、riven by rising demand for both residential and commercial properties,improved economic conditions,and supportive government reforms.These factors have attracted investors seeking lucrative opportunities.Reforms such as the Real Estate(Regulation and Development)Act(RERA)implemented in 2016 have sig

48、nificantly boosted investor confidence and transparency.Consequently,private investors are now exploring alternative financing options like private credit due to its flexibility in structuring deals,tailoring financing solutions,and swiftly providing developers access to capital compared to traditio

49、nal lenders.Furthermore,the increased involvement of international investors has strengthened the Indian real estate market,enhancing its growth prospects.The rise of private credit has had positive effects on the Indian real estate.It expedites project completion by enabling developers access to fu

50、nds,ensuring timely delivery.Moreover,it fosters innovation and diversification by supporting investments in specialized projects and new asset classes,thereby promoting market diversification and innovation.This heightened investment activity has increased market liquidity,making it more vibrant an

51、d attractive to all stakeholders.Although the private credit market is still in its early stages,its future in the Indian real estate sector seems promising.With growing investor confidence,deals are expected to increase in size.Specialized debt funds specifically focused on Indian real estate,are p

52、oised to significantly mobilize capital and facilitate investment.In essence,private credit is emerging as a crucial funding source,empowering Indian real estate developers to meet market demands and drive growth,thereby shaping the sectors landscape for years to come.7INVESTMENTS IN REAL ESTATETREN

53、DS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20236INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023TOTAL NUMBER OF AIFs INCREASED 10 x SINCE ITS INTRODUCTIONNo of AIFs IssuedSource:RBI Statistics42 101 135 143 209 302 414 547 641 732 885 1,088 -200 400 600 800 1,000 1,200Mar-

54、12Mar-13Mar-14Mar-15Mar-16Mar-17Mar-18Mar-19Mar-20Mar-21Mar-22Mar-23Rise of Private Credit:Alternate Investment FundsIndias real estate sector presently contributes 7.3%to the countrys GDP and is anticipated to double by 2047,thereby creating a wide variety of funding needs to support this projected

55、 growth.While the credit flow from the banking and NBFC segment has been robust,the lending terms are restrictive for business developers seeking opportunities for growth.Alternative Investment Funds(AIFs)address this need by providing developers with alternative capital sources,enabling them to fun

56、d projects with flexible terms and achieve their growth targets.AIFs present developers with a broader spectrum of financing choices compared to traditional banks.This flexibility allows developers to structure financing according to their specific requirements and risk tolerance.These funds cater t

57、o a diverse pool of investors,including High Net Worth Individuals(HNIs),institutional investors,and Non-Resident Indians(NRIs).By offering various risk-return profiles,AIFs attract investments from individuals and institutions looking to participate in Indias real estate market growth.Regulated by

58、the Securities and Exchange Board of India(SEBI),AIFs operate within a regulatory framework ensuring transparency and investor protection.This regulatory supervision fosters trust and confidence in the AIF market,drawing more investors and fostering long-term growth of the sector.Rise of Private Cre

59、dit in Indian Real Estate:Fuelling growth and bridging gapsThe Indian real estate sector post pandemic has shown remarkable resilience,driven by rising demand for both residential and commercial properties,improved economic conditions,and supportive government reforms.These factors have attracted in

60、vestors seeking lucrative opportunities.Reforms such as the Real Estate(Regulation and Development)Act(RERA)implemented in 2016 have significantly boosted investor confidence and transparency.Consequently,private investors are now exploring alternative financing options like private credit due to it

61、s flexibility in structuring deals,tailoring financing solutions,and swiftly providing developers access to capital compared to traditional lenders.Furthermore,the increased involvement of international investors has strengthened the Indian real estate market,enhancing its growth prospects.The rise

62、of private credit has had positive effects on the Indian real estate.It expedites project completion by enabling developers access to funds,ensuring timely delivery.Moreover,it fosters innovation and diversification by supporting investments in specialized projects and new asset classes,thereby prom

63、oting market diversification and innovation.This heightened investment activity has increased market liquidity,making it more vibrant and attractive to all stakeholders.Although the private credit market is still in its early stages,its future in the Indian real estate sector seems promising.With gr

64、owing investor confidence,deals are expected to increase in size.Specialized debt funds specifically focused on Indian real estate,are poised to significantly mobilize capital and facilitate investment.In essence,private credit is emerging as a crucial funding source,empowering Indian real estate de

65、velopers to meet market demands and drive growth,thereby shaping the sectors landscape for years to come.7INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20236INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023Category II AIFs:A Booming Investment Opp

66、ortunity in IndiaCategory II Alternative Investment Funds(AIFs)represent a class of investment instruments regulated by the SEBI,primarily focusing on investments in unlisted companies through private equity and debt funds.The investment flow into Category II AIFs has displayed consistent growth ove

67、r time.Recent data as of June 2023,reveals a year-on-year expansion of 8.70%.This upward trajectory signifies the growing enthusiasm among investors in India for private equity and debt funds,indicating a sustained interest in this investment avenue.CONSISTENT GROWTH IN CATEGORY II AIFsAIFs-Category

68、 II Investments(INR Bn)Source:RBI StatisticsOverall,Category II AIFs can be a valuable investment option for sophisticated investors who are comfortable with high risks and a long investment horizon.They offer the potential for high 335561382224177481,0641,5302,2042,52805001,0001,5002,0002,5003,000J

69、un-13Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22Jun-23SECTOR-WISE INVESTMENTS OF ALTERNATIVE INVESTMENT FUNDS(AIFs)Source:SEBIreturns through exposure to unlisted companies with significant growth potential.9INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20238INVE

70、STMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023Since its inception in 2012,the number of Alternative Investment Funds(AIFs)has experienced an exponential rise.As per the Securities and Exchange Board of India(SEBI),the total assets under management(AUM)of all AIFs in India r

71、eached INR 8,449 bn by June 2023,marking a substantial growth of 4.7 times from INR 1,795 bn in 2018.Concurrently,total investments by these funds surged 4.6 times,reaching INR 3,503 bn.The remarkable growth of AIFs can be credited to several factors including their efficient investment experience,f

72、unctioning within a regulated platform,and the diverse range of investment structures and themes they offer.This combination of factors has significantly contributed to their attractiveness and the substantial expansion theyve witnessed over the years.Cumulative net figures as at the end of June 30

73、2023(All figures in INR.Bn)Category of AIF Commitments Raised Funds Raised Investments Made Category I Infrastructure Fund 0.2 58.0 50.0Social Venture Fund 15.0 6.9 4.5Venture Capital Fund 435.3 225.6 192.4SME Fund 11.4 3.4 2.9Category I Total 637.4 294.0 249.8Category II 6,961.3 2,702.4 2,528.3Cate

74、gory III 850.6 744.8 725.0Grand Total 8,449.3 3,741.3 3,503.1Source:SEBINote:Category I AIFs include infrastructure funds,social venture funds,and venture capital funds.Category II AIFs include private equity funds and debt funds.Category III AIFs include hedge funds,real estate funds,and other spec

75、ialized funds.ACTIVITIES OF ALTERNATIVE INVESTMENT FUNDS(AIFs)INVESTMENTS BY ALTERNATIVE INVESTMENT FUNDS(AIFs)Type of Instruments(INR Bn)FY21 FY22 FY23 Growth Since FY21Unlisted Equity Shares/Equity Linked Instruments/LLP Interest 785 1,176 1,401 78%Listed Equity(excluding Listed/to be Listed on SM

76、E Exchange)387 468 664 71%Debt/Securitised Debt Instruments 608 826 946 56%Units of other AIFs 36 52 81 127%Liquid Funds 70 98 127 82%Listed/to be Listed Securities on SME Exchange 0.5 0.5 1.3 151%Others 119 220 160 35%Total 2,005 2,841 3,380 69%Source:SEBINote:Incremental data for AIFsSector FY21 F

77、Y22 FY23Real Estate 24.6%21.3%20.1%BFSI 20.3%18.2%18.1%Healthcare 6.7%7.1%6.8%IT/ITES 6.1%7.3%6.3%Retail 8.3%9.6%3.2%Others 34.0%36.5%45.4%Category II AIFs:A Booming Investment Opportunity in IndiaCategory II Alternative Investment Funds(AIFs)represent a class of investment instruments regulated by

78、the SEBI,primarily focusing on investments in unlisted companies through private equity and debt funds.The investment flow into Category II AIFs has displayed consistent growth over time.Recent data as of June 2023,reveals a year-on-year expansion of 8.70%.This upward trajectory signifies the growin

79、g enthusiasm among investors in India for private equity and debt funds,indicating a sustained interest in this investment avenue.CONSISTENT GROWTH IN CATEGORY II AIFsAIFs-Category II Investments(INR Bn)Source:RBI StatisticsOverall,Category II AIFs can be a valuable investment option for sophisticat

80、ed investors who are comfortable with high risks and a long investment horizon.They offer the potential for high 335561382224177481,0641,5302,2042,52805001,0001,5002,0002,5003,000Jun-13Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22Jun-23SECTOR-WISE INVESTMENTS OF ALTERNATIVE INVESTMENT FUNDS

81、(AIFs)Source:SEBIreturns through exposure to unlisted companies with significant growth potential.9INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20238INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023Since its inception in 2012,the number of Altern

82、ative Investment Funds(AIFs)has experienced an exponential rise.As per the Securities and Exchange Board of India(SEBI),the total assets under management(AUM)of all AIFs in India reached INR 8,449 bn by June 2023,marking a substantial growth of 4.7 times from INR 1,795 bn in 2018.Concurrently,total

83、investments by these funds surged 4.6 times,reaching INR 3,503 bn.The remarkable growth of AIFs can be credited to several factors including their efficient investment experience,functioning within a regulated platform,and the diverse range of investment structures and themes they offer.This combina

84、tion of factors has significantly contributed to their attractiveness and the substantial expansion theyve witnessed over the years.Cumulative net figures as at the end of June 30 2023(All figures in INR.Bn)Category of AIF Commitments Raised Funds Raised Investments Made Category I Infrastructure Fu

85、nd 0.2 58.0 50.0Social Venture Fund 15.0 6.9 4.5Venture Capital Fund 435.3 225.6 192.4SME Fund 11.4 3.4 2.9Category I Total 637.4 294.0 249.8Category II 6,961.3 2,702.4 2,528.3Category III 850.6 744.8 725.0Grand Total 8,449.3 3,741.3 3,503.1Source:SEBINote:Category I AIFs include infrastructure fund

86、s,social venture funds,and venture capital funds.Category II AIFs include private equity funds and debt funds.Category III AIFs include hedge funds,real estate funds,and other specialized funds.ACTIVITIES OF ALTERNATIVE INVESTMENT FUNDS(AIFs)INVESTMENTS BY ALTERNATIVE INVESTMENT FUNDS(AIFs)Type of I

87、nstruments(INR Bn)FY21 FY22 FY23 Growth Since FY21Unlisted Equity Shares/Equity Linked Instruments/LLP Interest 785 1,176 1,401 78%Listed Equity(excluding Listed/to be Listed on SME Exchange)387 468 664 71%Debt/Securitised Debt Instruments 608 826 946 56%Units of other AIFs 36 52 81 127%Liquid Funds

88、 70 98 127 82%Listed/to be Listed Securities on SME Exchange 0.5 0.5 1.3 151%Others 119 220 160 35%Total 2,005 2,841 3,380 69%Source:SEBINote:Incremental data for AIFsSector FY21 FY22 FY23Real Estate 24.6%21.3%20.1%BFSI 20.3%18.2%18.1%Healthcare 6.7%7.1%6.8%IT/ITES 6.1%7.3%6.3%Retail 8.3%9.6%3.2%Oth

89、ers 34.0%36.5%45.4%Private Credit:Fuelling Indias Real Estate BoomOver the past decade,private credit has swiftly risen within the Indian real estate market.As the market continues to mature and regulatory frameworks evolve,private credit is poised to assume an even more substantial role in propelli

90、ng the sectors growth.Between 2013 and 2023,the Indian real estate sector garnered private credit totalling USD 13.4 bn in the non-debt segment,averaging around USD 1.2 bn annually,except for the initial and COVID-19 pandemic years.Although private credit investments in India did not come to a halt

91、during the COVID-19 pandemic in 2020,they did experience a notable slowdown compared to preceding years.However,in 2021 and 2022,the Indian private credit market showed signs of recovery,witnessing a steady increase in investment activity.As the global economy rebounded from the pandemic,businesses

92、regained confidence and embarked on expansion and growth initiatives.This surge in demand for financing bolstered activity in the private credit market.Consequently,private credit funds attracted substantial capital inflows from investors seeking alternative investment avenues.This influx of capital

93、 facilitated market growth,enabling private credit lenders to offer financing to a broader spectrum of businesses.Overall,the combination of a favourable economic environment restored investor confidence,and conducive market conditions contributed to the robust recovery of the private credit market

94、in 2021,2022,and 2023.PRIVATE CREDIT DEALS IN INDIAN REAL ESTATEPrivate Credit Deals(USD Mn)Source:Knight Frank Research,Venture IntelligenceNote:Deals considered until 12?December 2023No of TransactionsPrivate Credit Deals(USD Mn)3811,067 1,733 1,819 1,831 1,926 1,046 304 1,159 1,154 1,018 01020304

95、050600500100015002000250020132014201520162017201820192020202120222023RESIDENTIAL SECTOR ROPED IN MAJORITY OF THE PRIVATE CREDIT INVESTMENTS OfficeSource:Knight Frank Research,Venture IntelligenceNote:Deals considered until 12?December 2023Share of Private Credit Deals(%)24%15%11%2%20%43%46%44%3%1%76

96、%85%89%98%70%41%30%100%53%90%74%3%10%24%2%7%25%0%20%40%60%80%100%120%20132014201520162017201820192020202120222023PRIVATE CREDIT INVESTORS FAVOURED RESIDENTIAL SECTORInvestor Type Private Credit Investment(USD Mn)Indian 8,144 Foreign 4,870 Co-Investment 425 Grand Total 13,439Source:Knight Frank Resea

97、rch,Venture IntelligenceMUMBAI RECEIVED HIGHEST PRIVATE CREDIT INVESTMENTS FOLLOWED BY NCRCity Private Credit Investments%Share(USD Mn)Mumbai 4,957 37%NCR 2,799 21%Bengaluru 2,743 20%Hyderabad 1,000 7%Pune 927 7%Chennai 723 5%Ahmedabad 211 2%Kolkata 81 1%Grand Total 13,439 100%Source:Knight Frank Re

98、search,Venture IntelligenceResidentialRetailWarehousing6%7%Over the past decade,there has been a considerable increase in private credit investments directed towards the Residential sector.Flexibility of lending terms in a down cycle for the housing market ensured takers for this route.In contrast,t

99、he Office sector received 20%of the total private credit investments.The Office sector has been more appealing to Private Equity(PE)investors over the years.Furthermore,within the private credit landscape,the Warehousing sector comprised 6%and the Retail sector constituted 2%of the total investments

100、 since 2023.The Warehousing sector received total investments worth USD 852 mn,while the Retail sector obtained investments totalling USD 251 mn.Mumbai held the largest share of private credit investments with 37%(USD 4,957 mn)followed by NCR at 21%(USD 2,799 mn)and Bengaluru at 20%(USD 2,743 mn).Th

101、ese three cities jointly contributed 78%of the total private credit transactions received in the Indian real estate sector since 2023.As majority of the private credit investments were inclined towards the residential segment,all the three cities benefited from the developing residential markets,thu

102、s attracting larger funding.11INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202310INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023Private Credit:Fuelling Indias Real Estate BoomOver the past decade,private credit has swiftly risen within the Indi

103、an real estate market.As the market continues to mature and regulatory frameworks evolve,private credit is poised to assume an even more substantial role in propelling the sectors growth.Between 2013 and 2023,the Indian real estate sector garnered private credit totalling USD 13.4 bn in the non-debt

104、 segment,averaging around USD 1.2 bn annually,except for the initial and COVID-19 pandemic years.Although private credit investments in India did not come to a halt during the COVID-19 pandemic in 2020,they did experience a notable slowdown compared to preceding years.However,in 2021 and 2022,the In

105、dian private credit market showed signs of recovery,witnessing a steady increase in investment activity.As the global economy rebounded from the pandemic,businesses regained confidence and embarked on expansion and growth initiatives.This surge in demand for financing bolstered activity in the priva

106、te credit market.Consequently,private credit funds attracted substantial capital inflows from investors seeking alternative investment avenues.This influx of capital facilitated market growth,enabling private credit lenders to offer financing to a broader spectrum of businesses.Overall,the combinati

107、on of a favourable economic environment restored investor confidence,and conducive market conditions contributed to the robust recovery of the private credit market in 2021,2022,and 2023.PRIVATE CREDIT DEALS IN INDIAN REAL ESTATEPrivate Credit Deals(USD Mn)Source:Knight Frank Research,Venture Intell

108、igenceNote:Deals considered until 12?December 2023No of TransactionsPrivate Credit Deals(USD Mn)3811,067 1,733 1,819 1,831 1,926 1,046 304 1,159 1,154 1,018 01020304050600500100015002000250020132014201520162017201820192020202120222023RESIDENTIAL SECTOR ROPED IN MAJORITY OF THE PRIVATE CREDIT INVESTM

109、ENTS OfficeSource:Knight Frank Research,Venture IntelligenceNote:Deals considered until 12?December 2023Share of Private Credit Deals(%)24%15%11%2%20%43%46%44%3%1%76%85%89%98%70%41%30%100%53%90%74%3%10%24%2%7%25%0%20%40%60%80%100%120%20132014201520162017201820192020202120222023PRIVATE CREDIT INVESTO

110、RS FAVOURED RESIDENTIAL SECTORInvestor Type Private Credit Investment(USD Mn)Indian 8,144 Foreign 4,870 Co-Investment 425 Grand Total 13,439Source:Knight Frank Research,Venture IntelligenceMUMBAI RECEIVED HIGHEST PRIVATE CREDIT INVESTMENTS FOLLOWED BY NCRCity Private Credit Investments%Share(USD Mn)

111、Mumbai 4,957 37%NCR 2,799 21%Bengaluru 2,743 20%Hyderabad 1,000 7%Pune 927 7%Chennai 723 5%Ahmedabad 211 2%Kolkata 81 1%Grand Total 13,439 100%Source:Knight Frank Research,Venture IntelligenceResidentialRetailWarehousing6%7%Over the past decade,there has been a considerable increase in private credi

112、t investments directed towards the Residential sector.Flexibility of lending terms in a down cycle for the housing market ensured takers for this route.In contrast,the Office sector received 20%of the total private credit investments.The Office sector has been more appealing to Private Equity(PE)inv

113、estors over the years.Furthermore,within the private credit landscape,the Warehousing sector comprised 6%and the Retail sector constituted 2%of the total investments since 2023.The Warehousing sector received total investments worth USD 852 mn,while the Retail sector obtained investments totalling U

114、SD 251 mn.Mumbai held the largest share of private credit investments with 37%(USD 4,957 mn)followed by NCR at 21%(USD 2,799 mn)and Bengaluru at 20%(USD 2,743 mn).These three cities jointly contributed 78%of the total private credit transactions received in the Indian real estate sector since 2023.A

115、s majority of the private credit investments were inclined towards the residential segment,all the three cities benefited from the developing residential markets,thus attracting larger funding.11INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202310INVESTMENTS IN REAL ESTATET

116、RENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023Investments in Real EstateTrends in Private Equity Investment in India in 202313INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202312INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023The landscape of

117、private credit in India promises an exhilarating trajectory,primarily fuelled by multiple pivotal factors.The sectors robust growth witnessed a deployment of over USD 1 bn in select transactions during 2023,instigating a sustained upward momentum.This trend is projected to persist,buoyed by an upsur

118、ge in investor interest and the evolving demands of Indian enterprises.Private credit entities have adeptly bridged gaps left by traditional financiers like NBFCs and SCBs.The governments supportive stance towards Alternate Investment Funds(AIFs)and Foreign Portfolio Investments(FPIs)has fostered a

119、conducive regulatory environment,propelling the growth of private credit.Evidenced by the Category II AIF market reaching INR 6.96 tn,investor enthusiasm for this asset class remains robust.High net worth investors are drawn to private credit for its potential to offer diversified fixed income portf

120、olios with attractive returns,solidifying its status as an increasingly sought-after investment option.OutlookInvestments in Real EstateTrends in Private Equity Investment in India in 202313INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202312INVESTMENTS IN REAL ESTATETRENDS

121、 IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023The landscape of private credit in India promises an exhilarating trajectory,primarily fuelled by multiple pivotal factors.The sectors robust growth witnessed a deployment of over USD 1 bn in select transactions during 2023,instigating a sustained upward m

122、omentum.This trend is projected to persist,buoyed by an upsurge in investor interest and the evolving demands of Indian enterprises.Private credit entities have adeptly bridged gaps left by traditional financiers like NBFCs and SCBs.The governments supportive stance towards Alternate Investment Fund

123、s(AIFs)and Foreign Portfolio Investments(FPIs)has fostered a conducive regulatory environment,propelling the growth of private credit.Evidenced by the Category II AIF market reaching INR 6.96 tn,investor enthusiasm for this asset class remains robust.High net worth investors are drawn to private cre

124、dit for its potential to offer diversified fixed income portfolios with attractive returns,solidifying its status as an increasingly sought-after investment option.OutlookOFFICE CONTINUES TO REMAIN THE MOST PREFERRED CHOICE AMONG INVESTORSOfficeSource:Knight Frank Research,Venture IntelligenceReside

125、ntialRetailWarehousing0%20%40%60%80%100%16%4%79%201135%2%63%201246%54%201340%14%46%201429%1%5%65%201527%13%2%57%201634%9%29%28%201754%3%25%18%201849%14%27%11%201964%6%21%9%202046%13%21%19%202145%6%37%12%202258%23%19%2023MUMBAI AND NCR MAINTAIN TOP SPOTS FOR INVESTMENTS IN 2023Source:Knight Frank Res

126、earch2022(USD Mn)2023(USD Mn)2,180 1,199 992 432 377 168 10 -500 1,000 1,500 2,000 2,500-200 400 600 800 1,000 1,200 1,400 1,600 1,800NCRMumbaiDiverseBengaluruChennaiPuneKolkata1,685 Mumbai835 NCR347 Bengaluru85 Chennai73 Multiple CitiesSource:Knight Frank Research,Venture Intelligence.*Investments

127、considered till 12?December 2023 CAUTION AMONG GLOBAL INVESTORS:REAL ESTATE RECEIVES USD 3.0 BN IN 2023PE Investments(USD Mn)No of Deals2,451 1,133 2,030 2,222 4,565 5,082 7,619 7,803 6,581 3,945 6,199 5,357 3,024 684050558687735247205231232011201220132014201520162017201820192020202120222023INVESTOR

128、S OPT FOR A CAUTIOUS APPROACH,LEADING TO A CONSERVATIVE SHIFT IN STRATEGIES 11801123202714709864421164010002000300040005000600020222023Q1Q2Q3Q4Source:Knight Frank Research,Venture Intelligence.2022 vs 202343%YOY15INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202314INVESTMEN

129、TS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023PE Investments in Indian Real Estate(USD Mn)Share of PE Investments in Indian Real Estate(%)OFFICE CONTINUES TO REMAIN THE MOST PREFERRED CHOICE AMONG INVESTORSOfficeSource:Knight Frank Research,Venture IntelligenceResidentialRetailW

130、arehousing0%20%40%60%80%100%16%4%79%201135%2%63%201246%54%201340%14%46%201429%1%5%65%201527%13%2%57%201634%9%29%28%201754%3%25%18%201849%14%27%11%201964%6%21%9%202046%13%21%19%202145%6%37%12%202258%23%19%2023MUMBAI AND NCR MAINTAIN TOP SPOTS FOR INVESTMENTS IN 2023Source:Knight Frank Research2022(US

131、D Mn)2023(USD Mn)2,180 1,199 992 432 377 168 10 -500 1,000 1,500 2,000 2,500-200 400 600 800 1,000 1,200 1,400 1,600 1,800NCRMumbaiDiverseBengaluruChennaiPuneKolkata1,685 Mumbai835 NCR347 Bengaluru85 Chennai73 Multiple CitiesSource:Knight Frank Research,Venture Intelligence.*Investments considered t

132、ill 12?December 2023 CAUTION AMONG GLOBAL INVESTORS:REAL ESTATE RECEIVES USD 3.0 BN IN 2023PE Investments(USD Mn)No of Deals2,451 1,133 2,030 2,222 4,565 5,082 7,619 7,803 6,581 3,945 6,199 5,357 3,024 684050558687735247205231232011201220132014201520162017201820192020202120222023INVESTORS OPT FOR A

133、CAUTIOUS APPROACH,LEADING TO A CONSERVATIVE SHIFT IN STRATEGIES 11801123202714709864421164010002000300040005000600020222023Q1Q2Q3Q4Source:Knight Frank Research,Venture Intelligence.2022 vs 202343%YOY15INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202314INVESTMENTS IN REAL E

134、STATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023PE Investments in Indian Real Estate(USD Mn)Share of PE Investments in Indian Real Estate(%)Private equity(PE)investments totalling USD 3.0 bn flowed into various sectors of the Indian real estate market in 2023,encompassing office spaces,wareho

135、using and residential segments.In comparison to 2022,PE investors in 2023 opted for a more cautious approach,leading to a 44%YoY decline in PE investments.Geopolitical uncertainties and high interest rates globally,contributed to investor wariness,resulting in limited market engagement.Since March 2

136、022,the US Federal Reserve and the Central Bank of Canada implemented multiple interest rate hikes,bringing current rates to 5.50%and 4.50%respectively,nearly doubling from pre-pandemic levels.This surge in interest rates has curbed investment activities from these nations due to increased capital c

137、osts and concerns about a potential recession.The impact was relatively moderate,with some substantial transactions in the office and warehousing sector.Investors strategically positioned themselves across sectors,with the office industry securing the highest share of investments.Foreign PE investor

138、s remained the primary contributors accounting for 78%of the total investments in 2023.However,over the past two years,India has experienced heightened interest from investors in the Middle East and Asia regions,partly due to Western PE investors susceptibility to rising interest rates and partly du

139、e to rising wealth in these regions.The distribution of private equity investments during this period saw the office taking the lead with 58%,followed by warehousing at 23%,and residential properties at 19%.The retail sector did not witness any PE deal in 2023.Mumbai and the National Capital Region(

140、NCR)received the largest proportion of investments across sectors in 2023 among Indian cities.In 2023,more than 69%of total investments were channelled into readily available assets,signalling the cautious stance adopted by investors.Despite prevailing global apprehensions impacting investments,resu

141、rgence is anticipated once interest rates reduce.17INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202316INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023ASIAN INVESTORS LEAD AS WESTERN COUNTRIES FEEL IMPACT OF RISING INTEREST RATESINVESTORS PRIORIT

142、ISE CAPITAL PROTECTION,CHOOSING SAFER READY ASSETSPRIVATE EQUITY PLAYERS PERSIST IN EXPLORING EQUITY,HOWEVER,DEBT WITNESSES A STEADY RISE USAUAEHong KongCanadaIndiaSingapore31%27%13%11%11%7%2022USASouth KoreaHong KongCanadaIndiaSingapore202353%22%11%7%6%1%2022Under ConstructionMix-useReadyNew Develo

143、pment9%11%39%41%2023Under ConstructionReadyNew Development2022202395%5%EquityDebtEquityDebt86%14%3%28%69%Private equity(PE)investments totalling USD 3.0 bn flowed into various sectors of the Indian real estate market in 2023,encompassing office spaces,warehousing and residential segments.In comparis

144、on to 2022,PE investors in 2023 opted for a more cautious approach,leading to a 44%YoY decline in PE investments.Geopolitical uncertainties and high interest rates globally,contributed to investor wariness,resulting in limited market engagement.Since March 2022,the US Federal Reserve and the Central

145、 Bank of Canada implemented multiple interest rate hikes,bringing current rates to 5.50%and 4.50%respectively,nearly doubling from pre-pandemic levels.This surge in interest rates has curbed investment activities from these nations due to increased capital costs and concerns about a potential recess

146、ion.The impact was relatively moderate,with some substantial transactions in the office and warehousing sector.Investors strategically positioned themselves across sectors,with the office industry securing the highest share of investments.Foreign PE investors remained the primary contributors accoun

147、ting for 78%of the total investments in 2023.However,over the past two years,India has experienced heightened interest from investors in the Middle East and Asia regions,partly due to Western PE investors susceptibility to rising interest rates and partly due to rising wealth in these regions.The di

148、stribution of private equity investments during this period saw the office taking the lead with 58%,followed by warehousing at 23%,and residential properties at 19%.The retail sector did not witness any PE deal in 2023.Mumbai and the National Capital Region(NCR)received the largest proportion of inv

149、estments across sectors in 2023 among Indian cities.In 2023,more than 69%of total investments were channelled into readily available assets,signalling the cautious stance adopted by investors.Despite prevailing global apprehensions impacting investments,resurgence is anticipated once interest rates

150、reduce.17INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202316INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023ASIAN INVESTORS LEAD AS WESTERN COUNTRIES FEEL IMPACT OF RISING INTEREST RATESINVESTORS PRIORITISE CAPITAL PROTECTION,CHOOSING SAFER READ

151、Y ASSETSPRIVATE EQUITY PLAYERS PERSIST IN EXPLORING EQUITY,HOWEVER,DEBT WITNESSES A STEADY RISE USAUAEHong KongCanadaIndiaSingapore31%27%13%11%11%7%2022USASouth KoreaHong KongCanadaIndiaSingapore202353%22%11%7%6%1%2022Under ConstructionMix-useReadyNew Development9%11%39%41%2023Under ConstructionRead

152、yNew Development2022202395%5%EquityDebtEquityDebt86%14%3%28%69%Office sector investmentsTHE OFFICE SECTOR REMAINED THE TOP RECIPIENT OF INVESTMENTS IN 2023OFFICE SECTOR INVESTMENTS DECLINED BY 29.3%IN 2023Amount invested(USD Mn)No of Deals399 393 934 893 1,326 1,392 2,612 4,201 3,198 2,509 2,882 2,4

153、94 1,763 5 4 7 5 10 6 14 21 17 7 1412 5 2011201220132014201520162017201820192020202120222023Source:Knight Frank Research,Venture Intelligence*Investments considered till 12?December 202305001000150020002500300073235168614008811219520222023Q1Q2Q3Q4Source:Knight Frank Research,Venture Intelligence.19I

154、NVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202318INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 During 2023,the office sector attracted investments totalling USD 1.8 bn.PE investments in the office sector declined by 29%YoY in 2023.Although n

155、otable deals occurred such as the USD 1.4 bn deal between GIC and Brookfield India Real Estate Trust REIT in H1 2023,the latter half of 2023 saw a subdued trend in PE investments.Approximately 91%of the investments in 2023 were directed towards ready assets,while 9%were allocated to developments und

156、er construction,indicating a tendency among investors to avoid risks.Mumbai,NCR,and Bengaluru emerged as primary destinations for office investments in 2023.The outlook for PE investment in Indian office assets remains optimistic.The demand for office spaces is expected to grow,while the supply of s

157、uch spaces is foreseen to be limited.These conditions are likely to drive up rental rates,making Indian office assets attractive to PE investors.INVESTORS FAVORED READY ASSETSUnder ConstructionNew DevelopmentReady69%29%3.6%202291%9%2023PE Investments in Office(USD Mn)2022 vs 202329.3%Office sector i

158、nvestmentsTHE OFFICE SECTOR REMAINED THE TOP RECIPIENT OF INVESTMENTS IN 2023OFFICE SECTOR INVESTMENTS DECLINED BY 29.3%IN 2023Amount invested(USD Mn)No of Deals399 393 934 893 1,326 1,392 2,612 4,201 3,198 2,509 2,882 2,494 1,763 5 4 7 5 10 6 14 21 17 7 1412 5 20112012201320142015201620172018201920

159、20202120222023Source:Knight Frank Research,Venture Intelligence*Investments considered till 12?December 202305001000150020002500300073235168614008811219520222023Q1Q2Q3Q4Source:Knight Frank Research,Venture Intelligence.19INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202318I

160、NVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 During 2023,the office sector attracted investments totalling USD 1.8 bn.PE investments in the office sector declined by 29%YoY in 2023.Although notable deals occurred such as the USD 1.4 bn deal between GIC and Brookfield I

161、ndia Real Estate Trust REIT in H1 2023,the latter half of 2023 saw a subdued trend in PE investments.Approximately 91%of the investments in 2023 were directed towards ready assets,while 9%were allocated to developments under construction,indicating a tendency among investors to avoid risks.Mumbai,NC

162、R,and Bengaluru emerged as primary destinations for office investments in 2023.The outlook for PE investment in Indian office assets remains optimistic.The demand for office spaces is expected to grow,while the supply of such spaces is foreseen to be limited.These conditions are likely to drive up r

163、ental rates,making Indian office assets attractive to PE investors.INVESTORS FAVORED READY ASSETSUnder ConstructionNew DevelopmentReady69%29%3.6%202291%9%2023PE Investments in Office(USD Mn)2022 vs 202329.3%Warehousing sector investmentsWAREHOUSING SECTOR RECEIVED INVESTMENTS WORTH USD 684 MN IN 202

164、3 Amount invested(USD Mn)No of DealsSource:Knight Frank Research,Venture Intelligence*Investments considered till 12?December 2023109-300 250 125 2,191 1,987 1,744 848 1,313 1,907 684 2-1 1 1 7 6 6 11782011201220132014201520162017201820192020202120222023INVESTMENTS IN WAREHOUSING SECTOR DIPPED 64%YO

165、Y IN 2023 20222023Q1Q2Q3Q42022 vs 202364%YOYSource:Knight Frank Research,Venture Intelligence.1225061100491296850500100015002000250021INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202320INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 Investment

166、in the warehousing segment contracted in 2023,totalling USD 684 mn,a notable decrease from the USD 1.9 bn recorded in 2022.The scarcity of high-quality ready assets also played a role in the decline of investments within the warehousing sector.PE investors are actively pursuing various subsectors wi

167、thin the warehousing market,focusing on segments such as e-commerce,logistics and 3PL(third-party logistics)facilities.Despite the decrease in PE investment observed in the warehousing sector during 2023,the outlook for this asset class remains positive.Anticipated growth in the demand for warehouse

168、 space driven by the expansion of logistics and manufacturing companies,is expected to attract PE investment in the warehousing sector.READY ASSETS SEE SURGE IN WAREHOUSING TRANSACTIONS IN 202364%32%4%202272%16%12%2023Under ConstructionNew DevelopmentReadyMixPE Investments in Warehousing(USD Mn)Ware

169、housing sector investmentsWAREHOUSING SECTOR RECEIVED INVESTMENTS WORTH USD 684 MN IN 2023 Amount invested(USD Mn)No of DealsSource:Knight Frank Research,Venture Intelligence*Investments considered till 12?December 2023109-300 250 125 2,191 1,987 1,744 848 1,313 1,907 684 2-1 1 1 7 6 6 1178201120122

170、0132014201520162017201820192020202120222023INVESTMENTS IN WAREHOUSING SECTOR DIPPED 64%YOY IN 2023 20222023Q1Q2Q3Q42022 vs 202364%YOYSource:Knight Frank Research,Venture Intelligence.1225061100491296850500100015002000250021INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:20232

171、0INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 Investment in the warehousing segment contracted in 2023,totalling USD 684 mn,a notable decrease from the USD 1.9 bn recorded in 2022.The scarcity of high-quality ready assets also played a role in the decline of investmen

172、ts within the warehousing sector.PE investors are actively pursuing various subsectors within the warehousing market,focusing on segments such as e-commerce,logistics and 3PL(third-party logistics)facilities.Despite the decrease in PE investment observed in the warehousing sector during 2023,the out

173、look for this asset class remains positive.Anticipated growth in the demand for warehouse space driven by the expansion of logistics and manufacturing companies,is expected to attract PE investment in the warehousing sector.READY ASSETS SEE SURGE IN WAREHOUSING TRANSACTIONS IN 202364%32%4%202272%16%

174、12%2023Under ConstructionNew DevelopmentReadyMixPE Investments in Warehousing(USD Mn)Residential sector investmentsRESIDENTIAL SECTOR RECEIVED INVESTMENTS WORTH USD 577 MN IN 2023Amount invested(USD Mn)No of DealsSource:Knight Frank Research,Venture Intelligence*Investments considered till 12?Decemb

175、er 2023PE INVESTMENTS IN RESIDENTIAL SECTOR DIPPED 12%YOY IN 2023Q1Q2Q3Q4Source:Knight Frank Research,Venture Intelligence.1,943 712 1,096 1,028 2,952 2,913 2,096 1,370 717 368 1,187 654 577 6135434974754621187231010201120122013201420152016201720182019202020212022H1 202320222023732552412255300284010

176、020030040050060070012%YoY23INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202322INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 Residential sector attracted USD 577 mn in investments during 2023,down 12%YoY.All PE investments in the residential s

177、ector were focused on under-construction projects.Foreign PE players accounted for 82%of the private equity investments in the residential sector.There has been a noticeable uptick in debt investments,with the share of PE investments via the debt route averaging 44%over the last two years.NCR and Be

178、ngaluru emerged as leading investment destinations,driven by development stage transactions involving prominent global players.INVESTMENTS LARGELY OBSERVED IN UNDER-CONSTRUCTION PROPERTIES IN 20232023Under ConstructionNew Development62%202238%100%DEBT INVESTMENTS SEE A STEADY RISE IN RESIDENTIALS IN

179、 THE LAST TWO YEARS31%34%32%56%51%68%48%79%65%48%19%40%48%69%66%68%44%49%32%52%21%35%52%81%60%52%2011201220132014201520162017201820192020202120222023DebtEquitySource:Knight Frank Research,Venture Intelligence2022 vs 2023PE Investments in Residential(USD Mn)Residential sector investmentsRESIDENTIAL S

180、ECTOR RECEIVED INVESTMENTS WORTH USD 577 MN IN 2023Amount invested(USD Mn)No of DealsSource:Knight Frank Research,Venture Intelligence*Investments considered till 12?December 2023PE INVESTMENTS IN RESIDENTIAL SECTOR DIPPED 12%YOY IN 2023Q1Q2Q3Q4Source:Knight Frank Research,Venture Intelligence.1,943

181、 712 1,096 1,028 2,952 2,913 2,096 1,370 717 368 1,187 654 577 6135434974754621187231010201120122013201420152016201720182019202020212022H1 202320222023732552412255300284010020030040050060070012%YoY23INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202322INVESTMENTS IN REAL EST

182、ATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 Residential sector attracted USD 577 mn in investments during 2023,down 12%YoY.All PE investments in the residential sector were focused on under-construction projects.Foreign PE players accounted for 82%of the private equity investments in the r

183、esidential sector.There has been a noticeable uptick in debt investments,with the share of PE investments via the debt route averaging 44%over the last two years.NCR and Bengaluru emerged as leading investment destinations,driven by development stage transactions involving prominent global players.I

184、NVESTMENTS LARGELY OBSERVED IN UNDER-CONSTRUCTION PROPERTIES IN 20232023Under ConstructionNew Development62%202238%100%DEBT INVESTMENTS SEE A STEADY RISE IN RESIDENTIALS IN THE LAST TWO YEARS31%34%32%56%51%68%48%79%65%48%19%40%48%69%66%68%44%49%32%52%21%35%52%81%60%52%2011201220132014201520162017201

185、820192020202120222023DebtEquitySource:Knight Frank Research,Venture Intelligence2022 vs 2023PE Investments in Residential(USD Mn)Retail sector investmentsRETAIL SECTOR DID NOT WITNESS A DEAL IN 2023Amount invested(USD Mn)No of DealsSource:Knight Frank Research,Venture Intelligence*Investments consid

186、ered till 12?December 2023-28-37 652 720 245 922 220 817 303-1-1 5 6 4 6 2 4220112012201320142015201620172018201920202021202225INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:202324INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 The retail sector

187、did not observe any PE deal in 2023.Heightened economic concerns globally and higher interest costs have made investors more cautious over large investments.The listing on a retail REIT will likely lead to increased interest among investors in the coming year.Investment platforms,optimistic about gr

188、owth prospects of the retail sector,are expected to continue making capital commitments as we witness a rebound in retail sales.INVESTOR INTEREST IN THE RETAIL SECTOR HAS EXPANDED BEYOND MAJOR METROS IN RECENT YEARSCity Amount invested Number(USD Mn)of deals Mumbai 1,664 9Bengaluru 512 2Pune 483 5Ch

189、andigarh 267 2Hyderabad 197 2NCR 192 2Ahmedabad 123 1Lucknow 115 1Chennai 106 2Nagpur,Amritsar 100 1Indore 61 2Bhubaneshwar 46 1Kolkata 77 1Grand Total 3,944 31Source:Knight Frank Research Note:The Grand Total represents investments since 2011.Retail sector investmentsRETAIL SECTOR DID NOT WITNESS A

190、 DEAL IN 2023Amount invested(USD Mn)No of DealsSource:Knight Frank Research,Venture Intelligence*Investments considered till 12?December 2023-28-37 652 720 245 922 220 817 303-1-1 5 6 4 6 2 4220112012201320142015201620172018201920202021202225INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTM

191、ENTS IN INDIA:202324INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023 The retail sector did not observe any PE deal in 2023.Heightened economic concerns globally and higher interest costs have made investors more cautious over large investments.The listing on a retail REIT

192、 will likely lead to increased interest among investors in the coming year.Investment platforms,optimistic about growth prospects of the retail sector,are expected to continue making capital commitments as we witness a rebound in retail sales.INVESTOR INTEREST IN THE RETAIL SECTOR HAS EXPANDED BEYON

193、D MAJOR METROS IN RECENT YEARSCity Amount invested Number(USD Mn)of deals Mumbai 1,664 9Bengaluru 512 2Pune 483 5Chandigarh 267 2Hyderabad 197 2NCR 192 2Ahmedabad 123 1Lucknow 115 1Chennai 106 2Nagpur,Amritsar 100 1Indore 61 2Bhubaneshwar 46 1Kolkata 77 1Grand Total 3,944 31Source:Knight Frank Resea

194、rch Note:The Grand Total represents investments since 2011.The subdued investment activity witnessed in recent times in emerging markets like India stemmed from high interest rates and geopolitical uncertainties,prompting cautious investor behaviour.US economic recession concerns further impacted se

195、ntiment,slowing investments in various sectors.However,amidst this backdrop,certain trends emerged,shaping the real estate investment landscape in India in 2023.Throughout the year,the office segment remained investors favourite due to the resilience exhibited by high-quality office assets while the

196、 warehousing sector continued to remain the second choice for PE investors.Despite ongoing global uncertainties,Indias strong economic fundamentals prompted RBI to revise the GDP growth forecast upward to 7%for FY 2024,driven by robust domestic consumption and government infrastructure spending.Urba

197、nization trends,evolving consumer preferences,and government initiatives like Housing for All and Smart Cities Mission are key drivers fostering investment in real estate.Emerging trends such as alternative asset classes,beyond traditional office and retail spaces,emphasising sustainability and tech

198、nology-driven solutions,are reshaping the sector.Going ahead,the Indian real estate industry presents attractive opportunities for PE investors.However,due to ongoing uncertainties in the investment landscape driven by high interest rate in major economies,prolonged geopolitical tension,and shifting

199、 investment preferences with growing interest from Asian investors in Indian real estate,we are abstaining from issuing an annual PE forecast for the upcoming year.As global challenges ease,the Indian economys resilience and the advantageous economics of real estate assets are expected to have a pos

200、itive impact on PE investment activities in the sector.OutlookREPORT AUTHORSNaresh SharmaAssistant Vice President-Research -GRAPHICS&DESIGN Nitin MoreAssistant Vice President-Graphics&D-Shishir Baijal Chairman and Managing D-CAPITAL MARKETSViral DesaiSenior Executive D-INDUSTRIAL&LOGISTICS SERVICES

201、Viral DesaiSenior Executive DBalbirsingh KhalsaExecutive DPinkesh TeckwaniNational D-OCCUPIER STRATEGY AND SOLUTIONSViral DesaiSenior Executive D-PROJECT MANAGEMENTDeben MozaSenior Executive D-FACILITIES&ASSET MANAGEMENT SERVICESSathish RajendrenSenior Executive Director -ADVISORY&VALUATION Gulam Zi

202、aSenior Executive Director Rajeev VijayExecutive Director-Advisory Saurabh MehrotraExecutive Director-Advisory -RESEARCH Vivek RathiNational Director -AHMEDABAD Balbirsingh KhalsaBranch D-BENGALURU Shantanu MazumderExecutive D-CHENNAI Srinivas AnkipattiSenior D-HYDERABAD Joseph Thilak National Direc

203、tor,Occupier Strategy&S-Kolkata Abhijit DasSenior Director-E-NCRMudassir ZaidiExecutive Director-N-PUNE P VilasBranch D-KEY CONTACTS26INVESTMENTS IN REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023The subdued investment activity witnessed in recent times in emerging markets like India s

204、temmed from high interest rates and geopolitical uncertainties,prompting cautious investor behaviour.US economic recession concerns further impacted sentiment,slowing investments in various sectors.However,amidst this backdrop,certain trends emerged,shaping the real estate investment landscape in In

205、dia in 2023.Throughout the year,the office segment remained investors favourite due to the resilience exhibited by high-quality office assets while the warehousing sector continued to remain the second choice for PE investors.Despite ongoing global uncertainties,Indias strong economic fundamentals p

206、rompted RBI to revise the GDP growth forecast upward to 7%for FY 2024,driven by robust domestic consumption and government infrastructure spending.Urbanization trends,evolving consumer preferences,and government initiatives like Housing for All and Smart Cities Mission are key drivers fostering inve

207、stment in real estate.Emerging trends such as alternative asset classes,beyond traditional office and retail spaces,emphasising sustainability and technology-driven solutions,are reshaping the sector.Going ahead,the Indian real estate industry presents attractive opportunities for PE investors.Howev

208、er,due to ongoing uncertainties in the investment landscape driven by high interest rate in major economies,prolonged geopolitical tension,and shifting investment preferences with growing interest from Asian investors in Indian real estate,we are abstaining from issuing an annual PE forecast for the

209、 upcoming year.As global challenges ease,the Indian economys resilience and the advantageous economics of real estate assets are expected to have a positive impact on PE investment activities in the sector.OutlookREPORT AUTHORSNaresh SharmaAssistant Vice President-Research -GRAPHICS&DESIGN Nitin Mor

210、eAssistant Vice President-Graphics&D-Shishir Baijal Chairman and Managing D-CAPITAL MARKETSViral DesaiSenior Executive D-INDUSTRIAL&LOGISTICS SERVICES Viral DesaiSenior Executive DBalbirsingh KhalsaExecutive DPinkesh TeckwaniNational D-OCCUPIER STRATEGY AND SOLUTIONSViral DesaiSenior Executive D-PRO

211、JECT MANAGEMENTDeben MozaSenior Executive D-FACILITIES&ASSET MANAGEMENT SERVICESSathish RajendrenSenior Executive Director -ADVISORY&VALUATION Gulam ZiaSenior Executive Director Rajeev VijayExecutive Director-Advisory Saurabh MehrotraExecutive Director-Advisory -RESEARCH Vivek RathiNational Director

212、 -AHMEDABAD Balbirsingh KhalsaBranch D-BENGALURU Shantanu MazumderExecutive D-CHENNAI Srinivas AnkipattiSenior D-HYDERABAD Joseph Thilak National Director,Occupier Strategy&S-Kolkata Abhijit DasSenior Director-E-NCRMudassir ZaidiExecutive Director-N-PUNE P VilasBranch D-KEY CONTACTS26INVESTMENTS IN

213、REAL ESTATETRENDS IN PRIVATE EQUITY INVESTMENTS IN INDIA:2023THINK INDIA THINK RETAIL-HIGH STREETS REAL ESTATE OUTLOOK-2023We like questions,if you have got one about our research,or would like some property advice,we would love to hear from you.The statements,information,data and opinions expressed

214、 or provided herein are provided on“as is,where is”basis and concerned parties clients are required to carry out their own due diligence as may be required before signing any binding document.Knight Frank(India)Private Limited(KFIPL)makes no warranties,expressed or implied,and hereby disclaims and n

215、egates all other warranties,including without limitation,implied warranties or conditions of merchantability,fitness for a particular purpose,or non-infringement of intellectual property or other violation of rights including any third party rights.Further,KFIPL does not warrant or make any represen

216、tations concerning the accuracy,likely results,or reliability of the use of the statements,information and opinions as specified herein.The statements,information and opinions expressed or provided in this presentation/document by KFIPL are intended to be a guide with respect to the purpose for whic

217、h they are intended,but in no way shall serve as a guide with regards to validating title,due diligence(technical and financial),or any other areas specifically not included in the presentation.Neither KFIPL nor any of its personnel involved accept any contractual,tortuous or other form of liability

218、 for any consequences,loss or damages which may arise as a result of any person acting upon or using the statements,information,data or opinions in the publication,in part or full.The information herein shall be strictly confidential to the addressee,and is not to be the subject of communication or

219、reproduction wholly or in part.The document/presentation is based on our understanding of the requirement,applicable current real estate market conditions and the regulatory environment that currently exists.Please note:Any change in any one of the parameter stated above could impact the information

220、 in the document/presentation.In case of any dispute,KFIPL shall have the right to clarify.Knight Frank Research Reports are available to download at Vivek RathiNational Director-RPiyali DasguptaDirector-Corporate Marketing&Public RCORPORATE-MARKETING&PUBLIC RELATIONSINDIA REAL ESTATE RESIDENTIAL AND OFFICE MARKET H1 2023India WarehousingMarket Reportknightfrank.co.in/research2023With warehousing demand sustaining at record levels,this sector is poised to take a quantum leap to match its more mature peers around the world.INDIA WAREHOUSING MARKET REPORT:2023BENGALURU URBAN FLOOD REPORT-2023