The growth was largely led by commercial space where Phoenix group received PE money through multiple deals.
Chennai: The real estate sector in Hyderabad witnessed a sudden burst in private equity investments in 2018- growing multi-fold to $1100 million from $30 million in 2017. Hyderabad helped southern region grab 54 per cent of the total PE investments in the real estate sector.
Surprisingly in 2018, Hyderabad became the second highest attractive location for PE investors after Mumbai, receiving more than three-fold investments compared to the collective previous three-year period. The city had attracted $120 million in 2015, $170 million in 2016 and $30 million in 2017.
The growth was largely led by commercial space where Phoenix group received PE money through multiple deals. Ascendas invested $200 million in the group in May 2018 and another $200 million in June. Xander invested $350 million in the group in October.
"While the city is poised for the growth and can continue to attract PE investments in the coming years, it will be interesting to see if this intensity continues or dries down in the coming years," said Shobhit Agarwal, MD and CEO of Anarock Capital.
Hyderabad surpassed the other two major cities in South India - Bengaluru and Chennai- in investments and accounted for half the investments in the region. With a total of $2200 million, southern region accounted for 54 per cent of the total private equity investments in real estate sector in 2018. Last year the region could grab only 17 per cent or $750 million in absolute terms. Even in 2016, the southern share was 18 per cent.
Overall real estate sector attracted over $4 billion of PE funds in 2018, a decline of 9 per cent against 2017.