Real Estate Private Equity funds cautious

December 17, 2007

Private Equity funds (PE Funds) focussed on real estate in India are approaching the Indian real estate market with caution and have drastically scaled down new funding of real estate projects in India. It has been reported that nearly 30% of existing investments made recently in residential projects by various real estate PE funds in new residential projects of leading Indian real estate developers are at very high valuations. Till end of 2007, there was optimism all around in this industry and a record number of projects were getting private equity funding. But the Indian real estate market has witnessed a correction of 10 - 25% in most tier 1 and tier 2 cities. This along with the recession in the USA has brought new project fundings by real estate private equity funds to a handful this quarter. As real estate research company, Real Estate Intelligence’s Head of Research, Roy Amalraj points out, “Real Estate funds are now very selective and do an in-depth analysis of costs involved and quality of existing projects”.

Posted in Real Estate Private Equity