Singapore Private Equity into Indian Real Estate Triples in Last 2 Years

• Singapore funds, over 2 years, comprise 41% share of total PE inflows into Indian real estate at USD 3.5 bn (against USD 1.15 bn in 2015 and 2016 combined)
• US and Canada-based PE investors come next with collective contribution of USD 3.8 bn PE funds in last 2 years
• Singapore’s GIC, Ascendas and Xander top PE investors; largely eye southern cities of Bengaluru, Hyderabad and Chennai

Singapore investors are betting big on Indian commercial real estate and other new sunshine sectors, including logistics and warehousing. Major Singapore-based private equity firms are funnelling billions of dollars into the country’s real estate sector, particularly in South Indian cities.

As per ANAROCK’s recent report Private Equity in Indian Real Estate, of the total USD 14.01 bn PE funds into Indian realty between 2015 to 2018, approx. 1/3^rd were pumped in by Singapore-based firms alone during the period – the highest among both domestic and foreign investors. However, of the total PE inflow of USD 1.1 bn in Q1 2019, there were no investments from any of the Singapore-based PE investors such as GIC, Ascendas and Xander. 

With funding from banks and NBFCs drying up over the last few years, Indian developers were being forced to explore debt and equity funding from various private equity players. Singapore investors were on top of the list, followed by PE players from US and Canada. After establishing a strong base in China, India was their logical next destination of preference.

In fact, with their more patient and long-term outlook, Singapore-based investors and developers have gained a substantial foothold in India’s property market over the last four years. In in 2015 and 2016, Singapore-based PE players pumped USD 1.15 bn into Indian real estate. This saw a three-fold jump in 2017 and 2018 – to nearly USD 3.5 bn.

Major players including GIC, Ascendas-Singbridge and Xander have been making steady investments into India. However, in recent years they have scaled up their investments and developments across segments. Besides commercial spaces including office and retail, players like Ascendas are also diversifying their portfolios and eyeing sunshine sectors like logistics and warehousing.

Source: ANAROCK Research

Over the past four years, GIC has invested close to USD 2.5 bn in Indian real estate, mainly in cities like Mumbai, Chennai, Bangalore, Hyderabad and NCR. For Ascendas, the preferred cities have largely been Hyderabad, followed by Chennai and MMR.

Meanwhile, US-based investors pumped in nearly USD 4.0 bn in the same period (2015 to 2018) and more than USD 700 mn in the first three months of 2019. From the leading US-based private equity players including Blackstone, Goldman Sachs, Hines, Warburg Pincus and Proprium Capital, Blackstone alone infused nearly USD 2.9 bn across Indian cities over the last four years.

A further deep-dive reveals that US-based investors, led by Blackstone, have largely invested in West Indian markets, including Mumbai and Pune. On the other hand, Singapore-based investors have focused on strengthening their foothold in the South Indian markets of Bengaluru, Hyderabad and Chennai.

PE players from Canada, led by Brookefield, were the third-largest investors into Indian real estate over the last four years, with PE infusions close to USD 2.3 bn. The other major PE player active in India is Canada-based pension fund CPPIB.