Private equity investment in real estate dips 4% to $2.3 bn in H1 FY25
ECONOMY & POLICY

Private equity investment in real estate dips 4% to $2.3 bn in H1 FY25

Private equity investments in the Indian real estate sector saw a 4 per cent decline to $ 2.3 billion in the first half of the current fiscal year, primarily due to a reduction in inflows to office assets, according to a report by Anarock.

The real estate consultancy highlighted that the total number of deals dropped to 17 during April-September this year, down from 24 in the same period the previous year.

Shobhit Agarwal, MD & CEO of ANAROCK Capital, explained that private equity investments in office assets are largely driven by foreign investors, but these investments have decreased due to global factors like geopolitical tensions and high interest rates.

He also noted that despite this slowdown, the overall investment figures and the dominance of foreign investors in the Indian real estate market remained relatively stable, thanks to significant investments by ADIA and KKR in Reliance Retail's warehousing assets.

Private equity investments in the sector amounted to $ 1.2 billion in the first half of FY21, $ 2 billion in H1 FY22, $ 2.8 billion in H1 FY23, $ 2.4 billion in H1 FY24, and $ 2.3 billion in H1 FY25.

The average deal size increased by 23 per cent year-on-year, mainly driven by the Reliance-ADIA/KKR warehousing transaction, which accounted for 67 per cent of total investments in the first half of FY25.

Anarock further reported that 87 per cent of the total private equity investments during this period came from foreign investors. Industrial and logistics assets attracted 67 per cent of the total investments, significantly outperforming both the office and residential sectors, which each accounted for 17 per cent.

While private equity investments in the office sector fell by 79 per cent, the industrial and logistics sector experienced a significant 378 per cent growth in investments compared to the same period the previous year.

Private equity investments in the Indian real estate sector saw a 4 per cent decline to $ 2.3 billion in the first half of the current fiscal year, primarily due to a reduction in inflows to office assets, according to a report by Anarock. The real estate consultancy highlighted that the total number of deals dropped to 17 during April-September this year, down from 24 in the same period the previous year. Shobhit Agarwal, MD & CEO of ANAROCK Capital, explained that private equity investments in office assets are largely driven by foreign investors, but these investments have decreased due to global factors like geopolitical tensions and high interest rates. He also noted that despite this slowdown, the overall investment figures and the dominance of foreign investors in the Indian real estate market remained relatively stable, thanks to significant investments by ADIA and KKR in Reliance Retail's warehousing assets. Private equity investments in the sector amounted to $ 1.2 billion in the first half of FY21, $ 2 billion in H1 FY22, $ 2.8 billion in H1 FY23, $ 2.4 billion in H1 FY24, and $ 2.3 billion in H1 FY25. The average deal size increased by 23 per cent year-on-year, mainly driven by the Reliance-ADIA/KKR warehousing transaction, which accounted for 67 per cent of total investments in the first half of FY25. Anarock further reported that 87 per cent of the total private equity investments during this period came from foreign investors. Industrial and logistics assets attracted 67 per cent of the total investments, significantly outperforming both the office and residential sectors, which each accounted for 17 per cent. While private equity investments in the office sector fell by 79 per cent, the industrial and logistics sector experienced a significant 378 per cent growth in investments compared to the same period the previous year.

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