Private equity inflow in Indian real estate up 27% in April-September at $1.79bn

Oct 8, 2021 | News

Private equity investment in Indian real estate rose 27% to $1.79 billion in the first six months of the current fiscal mainly driven by domestic funds, according to property consultant Anarock.

PE inflows stood at $1.41bn in the year-ago period.

According to the data, the office segment attracted nearly 33% of total PE inflows at $591m. The industrial and logistics sector saw significant investments of about $537m in the first half of FY’22, comprising a 30% overall share. 

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The residential sector saw investments to the tune of $394m, 22 % of the total PE funds. Data centres, land and mixed-use developments attracted the remaining 15% of the overall PE inflows, comprising 5% each.

“Displaying continued confidence in the Indian real estate sector, private equity funds pumped about 1,790m into the sector in the first half of the FY 2022,” Anarock Capital said in its ‘Flux Market Monitor for Capital Flows in Indian Real Estate’.

This is a 27% growth over the corresponding FY 2021, when inflows were approximately $1,410m, it added.

“The average ticket size for the PE deals in the current period declined by 32% – from $114m in H1 of FY21 to $78m in H1 of FY ’22,” said Shobhit Agarwal, MD & CEO – Anarock Capital.

“Notably, investors this time preferred single city deals in contrast to multi-city deals. As seen, the share of multi-city deals reduced from 77% to 42% in H1 of FY’22. Further, the top 10 deals in H1 FY22 contributed an approx 81% of the total PE investments in the country,” Agarwal said.

In comparison with H1 FY21, structured debt and equity witnessed considerable growth in H1 FY22, at 25% and 28%, respectively. Structured debt went primarily towards project-level assets.

While overall PE inflows in Indian real estate increased in H1 FY2022, the share of foreign funds reduced.

“Investments by domestic funds jumped from less than $10m in H1,FY21 to $650m in H1, FY22, a reflection of the improving situation in the country resulting in higher confidence by domestic funds,” Anarock said.

Foreign investors continued to remain major contributors with about 63% share of the total inflows of $1,790m. However, in the same period of FY2021, they contributed a 99% share.

Source: The Hindu Business

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