Real estate PE investments grew 28% on-year in Q1FY23: Anarock Capital 

Real estate private equity (PE) investments registered an increase of 28 per cent in Q1FY23 from that in Q1FY22. Real estate PE investments went up from $1.4 billion in Q1FY22 to $1.8 billion in Q1FY23. Recovery in real estate PE investments can be attributed to widespread vaccine coverage, removal of lockdown restrictions and improved market sentiments, as per real estate services company Anarock Capital.

Foreign PE investors, on the other hand, displayed an increased confidence with their contribution going up from 83 per cent in Q1FY22 to 89 per cent in Q1FY23. Domestic funds, on the other hand, declined from 17 per cent in Q1FY22 to 11 per cent in Q1FY23. Going further, NCR region gained notable traction from PE investors with the highest inflow at 48 per cent in Q1 FY23, a massive jump from 1 per cent in Q1FY22.

On the deals front, activity in Q1FY23 was dominated by multi-city deals from single-city deals. Top multi-city deals were Tata Realty and Infrastructure’s (TRIL) $700 million commercial deal and Omaxe Group’s mixed-use deal worth $57 million.

NCR-focused deals, on the other hand, included Bharti Enterprises’ $660 million commercial deal, TARC’s $175 million residential deal and Signature Global’s $52 million residential deal. There was a 53 per cent on-year rise in the average ticket size from $100 million in Q1FY22 to $153 million in Q1FY23 on investor focus on multi-city deals.

Top five deals in the sector remained a major driver for PE investments and account for 90 per cent of the total value of PE investments in Q1FY23.

MD and CEO of Anarock Capital Shobhit Agarwal 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 a 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.”