Private equity investment in real estate falls 4% in H1 FY25
Real Estate

Private equity investment in real estate falls 4% in H1 FY25

Private equity investments in real estate declined by 4% in the first half of FY25, largely due to reduced investments in the office sector, according to Anarock. The total number of deals also fell from 24 in H1 FY24 to 17 in H1 FY25.

Shobhit Agarwal, MD and CEO of Anarock Capital, noted that foreign investors primarily drive office investments, which have decreased due to global challenges like geopolitical tensions and rising interest rates. However, the overall stability of foreign investment in Indian real estate was supported by significant investments, such as the ADIA/KKR deal in Reliance Retail warehousing assets.

The average deal size increased by 23% year-on-year, largely influenced by the Reliance-ADIA/KKR warehousing deal, which accounted for 67% of total investments in H1 FY25. The decrease in deal numbers contributed to a rise in average ticket size. Residential real estate comprised 15% of transactions among the top 10 private equity deals, up from about 4% in the previous year.

Domestic and foreign investors maintained similar funding proportions as in the first half of the prior year, showcasing the continued dominance of foreign investments in the sector. The industrial and logistics sector attracted 67% of total investments, overshadowing both the office and residential sectors, which received 17% each. Investments in the office sector plummeted by 79%, while the industrial and logistics sector saw a remarkable 378% increase compared to the same period last year.

Aashiesh Agarwaal, SVP of Investment Advisory at Anarock Capital, highlighted that the share of private equity in residential real estate rose to 17%, up from 8% the previous year, indicating increased activity in that segment. However, robust pre-sales and greater participation from PSU banks in construction finance could lessen the demand for high-cost private equity financing.

The commercial office sector, traditionally favored by private equity, faces challenges from geopolitical tensions and rising interest rates. Despite these conditions, the office leasing market performed strongly this quarter, driven by Global Capability Centers (GCCs) and flexible workspace solutions.

The industrial and logistics sector remains appealing to investors due to growth from manufacturing, e-commerce, and consumption. There’s a noticeable shift from Grade B to Grade A properties, focusing on quality and ESG considerations, and demand for warehouses continues to be strong among institutional and HNI investors.

Private equity investments in real estate declined by 4% in the first half of FY25, largely due to reduced investments in the office sector, according to Anarock. The total number of deals also fell from 24 in H1 FY24 to 17 in H1 FY25. Shobhit Agarwal, MD and CEO of Anarock Capital, noted that foreign investors primarily drive office investments, which have decreased due to global challenges like geopolitical tensions and rising interest rates. However, the overall stability of foreign investment in Indian real estate was supported by significant investments, such as the ADIA/KKR deal in Reliance Retail warehousing assets. The average deal size increased by 23% year-on-year, largely influenced by the Reliance-ADIA/KKR warehousing deal, which accounted for 67% of total investments in H1 FY25. The decrease in deal numbers contributed to a rise in average ticket size. Residential real estate comprised 15% of transactions among the top 10 private equity deals, up from about 4% in the previous year. Domestic and foreign investors maintained similar funding proportions as in the first half of the prior year, showcasing the continued dominance of foreign investments in the sector. The industrial and logistics sector attracted 67% of total investments, overshadowing both the office and residential sectors, which received 17% each. Investments in the office sector plummeted by 79%, while the industrial and logistics sector saw a remarkable 378% increase compared to the same period last year. Aashiesh Agarwaal, SVP of Investment Advisory at Anarock Capital, highlighted that the share of private equity in residential real estate rose to 17%, up from 8% the previous year, indicating increased activity in that segment. However, robust pre-sales and greater participation from PSU banks in construction finance could lessen the demand for high-cost private equity financing. The commercial office sector, traditionally favored by private equity, faces challenges from geopolitical tensions and rising interest rates. Despite these conditions, the office leasing market performed strongly this quarter, driven by Global Capability Centers (GCCs) and flexible workspace solutions. The industrial and logistics sector remains appealing to investors due to growth from manufacturing, e-commerce, and consumption. There’s a noticeable shift from Grade B to Grade A properties, focusing on quality and ESG considerations, and demand for warehouses continues to be strong among institutional and HNI investors.

Next Story
Building Material

Ambuja Cements Drags JSW Cement to Court Over ‘Kawach’ Brand

Ambuja Cements, part of the Adani Group, has filed a trademark infringement case against JSW Cement in the Delhi High Court, alleging that its rival copied the ‘Kawach’ brand with its new product ‘Jal Kavach’.Justice Manmeet Pritam Singh Arora issued summons to JSW Cement and its subsidiary, JSW IP Holdings Pvt Ltd, while referring the matter to mediation. Hearings are scheduled to resume on October 15 if no settlement is reached.Ambuja, which registered the ‘Kawach’ trademark in 2019, argues that the term ‘Kavach’—meaning shield—is the distinctive feature of its branding. ..

Next Story
Technology

Bentley Systems Named Innovation Partner of the Year 2025 by Afcons

Bentley Systems, the infrastructure engineering software company, has been recognised by Afcons Infrastructure Limited as its Innovation Partner of the Year 2025 at the Innovation Partners 2025 Felicitation Ceremony in Mumbai. The award acknowledges Bentley’s contribution to Afcons’ engineering digitalisation journey through an enterprise agreement providing access to over 250 Bentley engineering software tools. This adoption has enabled Afcons to accelerate project delivery, standardise digital workflows, and strengthen innovation across its infrastructure portfolio. Among key i..

Next Story
Infrastructure Urban

SBI Sells 13.18% Stake in Yes Bank to Japan’s SMBC

State Bank of India (SBI) has completed the sale of a 13.18 per cent stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for over Rs 8,889 crore. The divestment is part of a Rs 13,482 crore deal finalised in May with SMBC and seven private banks.Following the transaction, SBI’s shareholding in Yes Bank stands at 10.8 per cent. The deal, involving 4,134.4 million shares at Rs 21.50 each, is the largest cross-border transaction in the Indian banking sector.SBI Chairman C S Setty described the 2020 RBI-led rescue of Yes Bank as a pioneering public-private partnership, addi..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?