Realty PE investments rise 28% in Q1

Hyderabad: Real estate PE investments registered an increase of 28 per cent in Q1 FY23 as compared to the same quarter last fiscal, says Anarock Capital's latest FLUX report. Improved market sentiments, widespread vaccine coverage, and lifting of lockdown restrictions helped this revival.

Shobhit Agarwal, MD & CEO of Anarock Capital, says: "The revival primarily rode on the top five private equity deals, which accounted for 90 per cent of the total value of PE investments in Q1 FY23. There has been 53 per cent increase in average ticket size in Q1 FY23 when compared to corresponding quarter previous fiscal. Equity contribution to the total PE investments in Indian real estate increased to 87 per cent in

Q1 FY23 from 84 per cent in the same quarter in a year-ago period."

Unlike Q1 FY22, deal activity in Q1 FY23 shifted back to multi-city deals, from the previous focus on single-city deals. NCR has gained significant attention from PE investors, with the highest city-wise inflow at 48 per cent in Q1 FY23, which is a huge increase from 1 per cent in the corresponding quarter previous year.

In Q1 FY23, deployments by JV platforms into in the commercial real estate sector have increased significantly at 74 per cent, especially in Grade A office spaces which are drawing very high investor interest. The industrial and logistics sector is also showing increased potential, with the creation of a new JV platform between Ivanhoe Cambridge, Bain Capital and Macrotech Developers for an investment of $1 billion.

Foreign PE investors displayed increased confidence, with their contribution increasing to 89 per cent in Q1 FY23 from 83 per cent in the same quarter last fiscal.