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Office Assets Garner the Highest Investments in 2019 with 50% Share: Cushman & Wakefield India

Awantika Mohanty • 13/02/2020
  • Office segment accounted for a 50.1% share in investment flows
  • Private Equity investments at INR 437 bn (USD 6.2 bn) in 2019, increase of 3% y o y
  • Foreign investors held close to 73% share in investment volumes in 2019
  • Large platforms targeting development of office and industrial assets continue to be formed

The year 2019 concluded with private equity investment volumes being recorded at healthy levels of INR 437.04 bn (USD 6.2 bn), a 3% y-o-y increase, after the analysis of market data by Cushman & Wakefield India. The office segment attracted INR 218.9 bn (USD 3.1 bn) from institutional investors in 2019, accounting for a 50.1% share of total investments in 2019. Foreign investors made up a significant share of 72.9% of overall investment inflows during 2019. Equity capital infusion formed 80.5% of the total investment inflows during 2019, up from a 64% share in 2018. 

Platforms joint ventures between foreign investors and domestic entities remain a bright spot indicating long term and patient capital being invested into the sector. Such long-term partnerships aimed at greenfield, brownfield developments especially in the commercial (office and retail) and industrial segments is a sign of increasing institutionalization in the real estate sector. 



Investment volumes

Interestingly, the absolute number of investment deals were lower by 17% y-o-y, pointing towards an increase in ticket size per deal and a spike in large sized transactions (more than INR 10 bn) during the year. Office sector investments dominated investment activity in 2019, like the previous year. PE inflows in Q4 were lower by 38.7% q-o-q at INR 61.22 bn (USD 0.9 bn). The continuing stress in the domestic PE market saw investments in residential segment decline for the third consecutive year, to stand at INR 74.57 bn (USD 1.1 bn) for 2019, marking a 22.3% y-o-y decline.

Major investment transactions

Varde Partners completed the acquisition of Lodha Excelus as part of Lodha’s New Cuffe Parade project in Wadala, Mumbai. Godrej Fund Management acquired a stake in Century Real Estate Holdings’ office property in Hebbal, Bengaluru in another notable transaction during the quarter. Xander’s acquisition of retail assets in Amritsar and Nagpur from TRIL and Blackstone’s buyout of an Indiabulls Real Estate subsidiary, bringing in an office asset and land parcel in Delhi NCR and Mumbai, respectively in the portfolio were the other large transactions in the quarter. PE majors Blackstone, Brookfield Asset Management and Xander Group were the largest investors in 2019 with a combined share of 48% in the annual investment volumes.


  • The office segment attracted INR 218.9 bn (USD 3.1 bn) from institutional investors in 2019, accounting for a 50.1% share of total investments in 2019. 
  • Close to 90% of this investment was equity based, signaling the strong momentum driven by institutional investors in this asset class. 
  • Key transactions: Blackstone’s stake acquisition of office assets of Indiabulls in Mumbai and Gurugram along with acquisition of One BKC (A Wing) in two separate transactions. Japan’s Sumitomo Corporation buying a 3-acre land parcel in Bandra Kurla Complex for development of an office complex was another notable office segment transaction.


  • Investments in the retail segment increased by a multiple of 2.8X with recorded investments of INR 55 bn (USD 0.8 bn) in 2019. 
  • The segment received significant interest primarily from two investors, Xander Group’s Virtuous Retail and ADIA backed Lake Shore India Advisory. 
  • Healthy consumption demand and favorable demographics are major drivers of investments in this asset class in both Tier I & II cities.


  • It accounted for an 8.7% share in 2019 annual investments, with INR 38.1 bn (USD 0.5 bn) invested during the year. 
  • This segment is undergoing a significant evolution with entry of organized players and rising institutionalization from being highly fragmented and unorganized in the past.
  • Investors including ESR, Logos, Xander Group, Morgan Stanley, Ascendas deploying funds across multiple cities were the highlights for investments in this asset class. 


  • The residential segment accounted for a 17.1% share in 2019, even though the investment inflows in this segment at INR 74.57 bn (USD 1.06 bn) were lower on a y-o-y basis in absolute terms. 
  • Foreign investment activity: Hines, Keppel Land, Fosun Group, CDPQ and ADIA (in a platform with HDFC) were active in this asset class in 2019 apart from some limited action by domestic NBFCs. 
  • Investments in residential sector may see some push with the setting up of the Special Window for Funding Stalled Affordable and Mid Income Housing Projects (SWAMIH) approved by the Union Cabinet.
The PE activity observed in 2019, with volumes touching INR 437 bn in comparison to INR 424.4 bn in 2018 , confirms the confidence of institutional investors in the Indian real estate market. With strong demand in the commercial segment, investor interest has remained robust in this asset class, for core and build-to-core opportunities, despite the tepidness in the residential sector. 

Mr Anshul Jain, Managing Director – South East Asia and India, said, "We expect investment volumes to remain healthy on account of anticipated deployment of fund commitments that have been made across the office and warehousing/logistics platforms. In addition, strategic investments in alternative segments like co-living / student housing, co-working, and data centers are likely to garner active interest from institutional investors."

ANNEXURE: Q4 2019 



Investee Transaction Type City  Investment (INR BN)
Varde Partners Lodha Group Office Mumbai  10.55
Virtuous Retail Tata Realty & Infrastructure Ltd Retail Amritsar, Nagpur  7.00
Xander Group   Industrial Mumbai, Chennai  6.00
Keppel Land Rustomjee Group Residential Mumbai  4.10
ESR GMR Industrial Hyderabad  3.85
Mapletree Investments Ajanta Enterprises Office Pune  1.70

Source: Cushman & Wakefield Research India

Major investment platforms

The last quarter was also notable for the creation of a few platforms with Blackstone partnering with Hiranandani Group to foray into the warehousing / logistics segment with an investment commitment of INR 25 bn across multiple cities. Blackstone has also partnered with All cargo Logistics to invest INR 3.8 bn with plans for further investment in existing as well as development of new assets. In another transactions, HDFC Capital Advisors partnered with Arvind Smart Spaces Ltd for developing affordable and mid segment projects with an investment commitment of INR 2.5 bn.


Mumbai led the annual investment volume with a 32% share, followed by Bengaluru at 14%. Pune had a 7% share in the overall investments for 2019, followed by Hyderabad and Chennai at 6% each. 

Multi city investments which also included Tier II & III cities like Amritsar, Nagpur, Udaipur and Agra along with Tier I cities held a 30% share in the annual investment figures. Q4 2019 exhibited a similar trend with Mumbai leading the quarter’s fund inflows with a 30% share, followed by Bengaluru at 15.5%. Hyderabad, Chennai and Pune contributed 5 - 6% each, while multi city investments held a 34.5% share in the quarter’s inflows.


In Q4 2019, the office segment constituted 50% of the quarterly investments, followed by residential and industrial segments with respective shares of 20% and 19%. The retail segment had an 11% share in the quarter’s PE inflows.

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