Real estate PE investments registered an increase of 28% in Q1 FY23 as compared to Q1 FY22, states ANAROCK Capital's latest FLUX report. Improved market sentiments, widespread vaccine coverage, and lifting of lockdown restrictions helped this revival.
Shobhit Agarwal, MD & CEO - ANAROCK Capital, says, "The revival primarily rode on the top 5 private equity deals, which accounted for 90% of the total value of PE investments in Q1 FY23. There has been 53% increase in average ticket size in Q1 FY23 when compared to Q1 FY22. Equity contribution to the total PE investments in Indian real estate increased to 87% in Q1 FY23 from 84% in Q1 FY22."
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% in Q1 FY23 - a huge increase from 1% in Q1 FY22.
Asset Class-wise Funding
In Q1 FY23, deployments by JV platforms into in the commercial real estate sector have increased significantly at 74%, especially in Grade A office spaces which are drawing very high investor interest.
The Industrial & Logistics sector is also showing increased potential, with the creation of a new JV platform between Ivanhoe Cambridge, Bain Capital & Macrotech Developers for an investment of USD 1 Bn.
Domestic vs Foreign Funding
Foreign PE investors displayed increased confidence, with their contribution increasing to 89% in Q1 FY23 from 83% in Q1 FY22.