With $3.5 billion, Singapore private equity firms lead investors list in domestic realty

With the domestic real estate sector emerging as the most lucrative investment destination on the global map, Singapore-based private equity firms lead the chart having pumped in close to USD 3.5 billion in the past two years alone, says a report. According to a report by Anarock Property Consultants, while between 2015 and 2016, Singapore-based PEs invested nearly USD 1.15 billion into the domestic realty, and the same jumped three-fold in 2017 and 2018 to nearly USD 3.5 billion. "Singaporean investors are betting big on domestic commercial realty and new sunshine sectors like logistics and warehousing. Major Singapore-based PE firms are funnelling billions of dollars into the country's realty sector, particularly into the Southern cities," Anarock's Shobhit Agarwal said.

As per the report, of the total USD 14.01 billion PE investments into domestic realty between 2015 and 2018, nearly one-third were pumped in by Singapore-based funds alone, which was the highest among both domestic as well as foreign investors.

"With funding from banks and NBFCs drying up over the past few years, developers are being forced to explore debt and equity funding from various private equity players.

"Singaporean investors were on top of the list, followed by PE players from the US and Canada. After establishing a strong base in China, India was their logical next destination of preference," he said.

While the Singaporean government fund GIC has invested USD 2.5 billion during the period mainly in cities like Mumbai, Chennai, Bengaluru, Hyderabad and Delhi-NCR.
Ascendas, another fund from the city-state, has invested USD 830 million during this period, mostly in Hyderabad, Chennai and Mumbai regions.

Another large player from the island nation is Xander which has invested USD 910 million across the major cities.

"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," Agarwal said.

Meanwhile, American funds pumped in nearly USD 4 billion in the same period (2015-18) and more than USD 700 million in the first three months of 2019.

However, of the total PE inflows of USD 1.1 billion in 2019 so far, none of it has come from any Singapore-based PEs.

"Among the leading US-based PEs like Blackstone, Goldman Sachs, Hines, Warburg Pincus and Proprium Capital, Blackstone alone infused nearly USD 2.9 billion over the last four years mostly in Mumbai and Pune," the report said.

Funds from Canada, led by Brookefield, are the third- largest during this period, with close to USD 2.3 billion. Canadian pension fund CPPIB is also a key player.