PE investments in Indian real estate dip 12% to $2.3 billion in H1

The level of flows has remained below the pre-pandemic level of $4.2 billion in H1 FY20

The flow of private equity (PE) money into Indian real estate declined by 12 per cent year-on-year (Y-o-Y) to $2.3 billion in April-September 2023 (H1FY24) from $ 2.7 billion in the same period last year. The decline in flows tracked overall lower investments in the residential sector, according to real estate banking advisory firm Anarock Capital.
 

The flows have remained below the pre-pandemic level of $4.2 billion in H1FY20. During the first wave of the Covid-19 pandemic, PE investments had declined to $1.5 billion H1FY21. Later, investments rose to touch $2 billion in H1FY22.  
 

Equity investments continued to be the preferred route for investors in H1FY24, said Shobhit Agarwal, managing director and chief executive officer, Anarock Capital.
 

The share of equity rose to 89 per cent in H1FY24 from 78 per cent in H1FY23.
 

The top 10 deals accounted for 95 per cent of the total value of PE investments in H1FY24 compared to 81 per cent in H1FY23.

Office assets dominated large-ticket equity investments in H1FY24. This can be attributed to continued preference by investors in Grade-A office assets with quality tenants.
 

Meanwhile, data centres are emerging as a new asset class for investment with a value of $73 million. Residential real estate continued to be an attractive destination for debt investments in H1FY24, Anarock added.

Multi-city transactions have increased sharply during H1FY24, dominated by the Brookfield India REIT & GIC of Singapore. Mumbai Metropolitan Region (MMR) led the transaction league tables in city-specific transactions, reporting investments of $543 million in H1FY24, compared to $307 million in H1FY23.