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PE INVESTMENT INFLOWS INTO THE INDIAN REAL ESTATE expected to be one of the tallest warehouse structures in India,
STANDS AT $704 MILLION IN Q2 2022 constructed on a single plinth and rising to a height of 17 meters
Private equity investment inflows into the Indian real estate sector at the eaves.
stood at $704 million (`56 billion), according to the latest data by In the last 12 months, Lodha Industrial and Logistics Park has CONSTRUCTION
Savills India, a global property consulting firm. completed 300 acres of plot sale and ‘built-to-suit’ leases. It
The current macro-economic situation influenced in part by the counts global entities including FM Logistic, Flyjac Logistics, Aptar
global tensions, commodity constraints, resultant inflationary Pharma, Katerra, Swegon and others among its clients.
pressures and monetary tightening are yet to impact the real Following the implementation of the Goods & Services Tax (GST)
estate investment markets. and the emergence of ecommerce, the Indian logistics and
Due to the declining supply of structured credit into residential real warehousing sector is headed towards transformative growth.
estate, the mainstay of PE transactions has been leased office The demand for warehousing space has stood out in the last few
purchase which are high in volume and make the trend lumpier quarters led by penetration of e-commerce and growth of third-
in certain quarters as is also evinced in the 32% QoQ decline. party logistics in the middle of the ongoing pandemic scenario.
Private equity investment inflows into the Indian real estate A favourable regulatory backdrop along with the government’s
sector have been strong in the yield asset classes like office, support through policy and reforms are further expected to
warehousing and data centres. Life sciences is another sector boost the infrastructure spend and in turn the overall demand for
which will emerge as a consolidated asset class in the coming modern warehousing.
years. The uptake in office leasing and steady performance of
REITs further underpins the strength of this sector. We will also METRO PROJECTS TO GENERATE `80,000 CRORE
witness more global investor participation in the housing sector BUSINESS OPPORTUNITIES FOR CONSTRUCTION
which will fill up the void created post the October 2018 crises. COMPANIES, SAYS ICRA
As per the data, commercial office assets continued to claim the The domestic metro rail projects will provide business opportunities
lion’s share, of the PE investment during Q2 2022. All the quarterly worth `80,000 crore for construction companies over the next five
investment came from foreign institutional investors and was years, according to ICRA
concentrated in core office assets across Mumbai, Chennai and In India, 15 cities have operational metro networks of about 746
the NCR. km (many of which are undertaking expansion), the agency said
Additionally, India’s life sciences sector holds huge potential for adding another seven cities have under-implementation metro
attracting PE funds in the current decade. This is owing to the projects of about 640 km.
availability of a large talent pool at significantly competitive This is apart from 1,400 km of metro rail projects worth `2 trillion in
cost making India a compelling destination for global research the approval/proposal stages, of which a 352-km of new metro
& development (R&D) and manufacturing. Betting big on this network has been approved, with the balance being in the
trend, global investment firm called Actis has invested USD proposal stage.
200 million (USD 16 billion) in Rx Propellant which is involved in Metro rail projects offer `80,000 crore business opportunities to
development and marketing of life sciences real estate projects construction firms over the next five years, it said.
across Hyderabad and Bengaluru. Given the government’s thrust for infrastructure development, the
Similar to Q1 2022, commercial office assets remain the front metro rail network is likely to witness 2.7 times expansion in the
runner garnering a major share of the investment pie. PE next five years.Typically, the metro rail development cost ranges
investment in the life sciences research and development real between `280-320 crore/km for elevated metro and the cost
estate has picked up momentum since 2021 and we expect could be much higher in the case of an underground metro
this sector to continue to grow aided by government policies, network.
competitive costs, and growing talent pool among other factors. Civil construction forms 35-45 per cent of the overall cost. Given
the large size of the metro projects, this is likely to offer sizeable
LODHA TO DEVELOP 1.1-MILLION-SQ-FT WAREHOUSE, opportunities for construction companies over the next five years.
DISTRIBUTION CENTER FOR SKECHERS AT PALAVA
Lodha Developers, listed as Macrotech Developers has entered
into an agreement with global lifestyle, athletic footwear and
apparel brand Skechers to develop a 1.1-million-sq-ft warehouse
and distribution center at Lodha Industrial and Logistics Park (LILP),
Palava near Mumbai.
The built-to-suit development will be undertaken by Palava
Induslogic 2, where Lodha and an affiliate of Morgan Stanley
Real Estate Investing have partnered for developing a warehouse
park spread across 72 acres of land parcel.
The development of the new Skechers Distribution Centre will be
undertaken in two phases, with the first phase being delivered in
mid-2023. The state-of-the-art logistics centre will be the second
largest national distribution center for Skechers in Asia and is also

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