Delhi-NCR real estate market is expected to move up by 50% aprox in terms of private equity investment in real estate market. In recent years, the real estate investment has been sluggish in Indian Real Estate Market. However, a positive movement is being expected and this reform can be considered as the result of new stable govt. in centre.
PE investment scenario in real estate has been in tune with the subdued economy in last one year. This is only recently that it has picked up in the hope of a stable and growth-friendly government. NCR real estate received an investment of Rs 1650 crore in 2013, which is almost more than double of last 2012’s PE investment. PE investment is more guided by an anticipation of profit than anything else and with some slowdown in real estate activity and the possibility of the new government driving the economy out of this is a reason why PEs are positive for India and especially for Real estate market.
For private equity funds, NCR property market is considered as one of the preferred choices. Indian realty sector has gained an increase of 28 % as compared to the previous quarter and 2.5 times the equity investment in first quarter of 2013, says a report by Cushman and Wakefield. Delhi NCR real estate has already attracted private equity investment of Rs.80 cr. in Q1, 2014. No doubt, attractive valuations and low level of bank funding to the sector has played their part too.
With affordable property prices, Delhi NCR region has always been a strong player in Indian realty. It is being expected that, as Delhi has not been able to provide mid segment homes, Noida and Gurgaon real estate will win over it as being favourite destination for home buyers.
Noida and Gurgaon would be the major beneficiary of the PE investments in Delhi-NCR. Gurgaon, Sohna Road and Noida would be the preferred area for the PE investors in Delhi-NCR.Major destinations for PE investment of NCR will be Noida, Greater Noida (west) Yamuna expressway and Ghaziabad. However tier-2 cities are also expected to give better returns as their prices are low and in any push in prices, they are expected to surge faster.
Formation of a stable government certainly has a positive impact in helping the revival of the overall sentiment of the real estate sector. The matter of fact that, only housing sector at this moment has the capability to turn around the weak macro-economic sentiments and revive demand.
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