Private Equity (PE) funds are giving more preference to western and southern cities over cities from other regions. The past three year investment of PE is recorded to be $ 5.16 billion (Rs 27,907 crore), 84 % of the total was invested in the projects from southern and western regions of the country.The realty research data of VCCEdge claimed that most of the PE investment was observed in western and southern cities like Bangalore, Mumbai, Pune and Chennai; whereas New Delhi observed fund of $ 722 million in the year 2012.The reason behind PE’s more investment in southern and western cities over the northern region is south and west regions have more urban cities compared to north, which makes it a better investment target. North region has only few urban centers like Delhi and NCR. A PE company stated while explaining the condition that the urban regions provide better visibility of returns.Kotak Realty Fund with the assets of $ 811 million has invested 70% of its fund in the southern regions. US based PE fund, Blackstone invested around $ 600 million in Indian real estate in the last two years and all investment was made in the projects from Bangalore, Pune and other southern and eastern cities. This investment included
- Investment of DLF-Akruti in Pune for $153 million (Rs 810 crore)
- $200-million (Rs 1,000 crore) deal with Bangalore-based Embassy Group
- $200 million investment in Manyata IT park at Bangalore
- $ 80 million in EON SEZ at Pune
NCR is a residential area which will never help you to get big deals and Big PEs does not go for 100-150 crore deals. As a result, investments in NCR are lowered by PE investors. The developers are moving towards new markets such as Nashik, Nagpur, and Coimbatore which can further affect the whole view of PE investments in these regions.