Institutional funding in realty down by 31 per cent
A large part of the funding—$2.1 billion out of $2.2 billion—came from private equity firms.
Chennai: Institutional funding in the real estate sector was down 31 per cent to $2.2 billion in H1 2019 against $3.2 billion in the same period last year as fund inflow from NBFCs fell 73 per cent.
A large part of the funding — $2.1 billion out of $2.2 billion— came from private equity firms. But, even this funding was down 19 per cent from $2.6 billion in H1 2018. Inflows from NBFCs saw 73 per cent fall from $520 million in H1 2018 to $140 million in H1 2019.
The general elections cast a shadow on funding, including private equity, into Indian real estate. However, post elections, the funds infused $580 million into the market. RBI's tightening norms for NBFC and HFC lending post the default by IL&FS last year too had a severe impact on the real estate funding.
With $1.4 billion, commercial real estate bagged the largest 64 per cent share, while residential real estate attracted over $270 million, retail real estate $260 million and logistics and warehousing $200 million.
Office space has been attracting large private equity investments of late and Mumbai has been witnessing several such large deals. In total, Mumbai Metropolitan Region saw maximum institutional funding of $530 million, followed by Pune with nearly $250 million. Southern cities - Bengaluru, Chennai and Hyderabad - collectively attracted over $610 million in H1 2019.