PE Investment Receives Massive Boost In Real Estate: Report

Investments in the real estate sector with trends in private equity investment investments in India for Q1 2022 received a major boost, according to leading global consultant Knight Frank. The report claimed that there is a strong growth in private equity investments in data centres in India. The entire PE investments in data centre stood at USD 2209 mn which is 259% higher when compared to investment received in the 2016 financial year. The sector 26% of the entire PE investment received by real estate sector in the year 2021.

According to the report, nearly 96% of the total PE investment in data centres since 2011 has come from foreign investors. The growth in data centres remained quite robust in the last 5 years with investments coming from real estate players and from PE funds. Data centres occupied the second spot when it comes to total investment share in 2021 leaving behind warehousing and residential. The focus remains metro and tier 1 cities like Mumbai, Chennai, Bengaluru, and Hyderabad. Meanwhile, Pune and Indore also captured the interest of investors.

At $851mn, Mumbai gained the maximum cumulative volume of investments since 2011 followed by Bengaluru with $427. Delhi obtained cumulative PE investments of approximately $ 235 mn in data centres in the same financial year.

According to Shishir Bajaj, Chairman and MD, Knight Frank India, "In India, the current capacity of data centres in relation to the volume of data created is low, which lends scope for creation of more data centres. Going forward, India's growing reliance on digital payments, ever-increasing data consumption, and a surge in e-commerce usage would need enhanced digital infrastructure, making Data Centres a sunrise sector with high investor interest".

It is worth mentioning that shares of data centres in total PE investment in real estate in India has received a major boost from the 2016 to 2021. The total investment in the five asset classes including office, residential, retail, warehousing, and data centres registered a growth of $8.4 bn. Of this total share of data centres registered 26% growth of Rs 2.2 bn or Rs 2209 mn.