Private Equity deal activity in Indian Real Estate declines in Q1 FY24
Real Estate

Private Equity deal activity in Indian Real Estate declines in Q1 FY24

During the first quarter of the current financial year (Q1 FY 2024), reported private equity (PE) deal activity in India, experienced a slight decline compared to the same period the previous year. In Q1 FY 2024, PE investments in real estate amounted to $1.9 billion, down from $2 billion in Q1 FY 2023.

ANAROCK Capital's report FLUX for Q1 FY24 revealed that the overall deal numbers were boosted by a significant transaction totalling $1.4 billion, namely the Brookfield India RE Trust REIT - GIC transaction. This particular deal accounted for approximately 75 per cent of the total deal activity during the period.

Shobhit Agarwal, MD and CEO of ANAROCK Capital, explained that excluding this deal, private equity activity remained subdued due to a high-interest rate environment and global uncertainties. Agarwal further mentioned that foreign investors tend to focus on equity investments in office assets, which already tilts the scale in favour of office assets in Indian real estate. The single large deal between the consortium of GIC and Brookfield REIT with Brookfield AMC further skewed the mix during the quarter.

The average ticket size for deals in Q1 FY24 notably increased to $192 million from $100 million in FY 2023. This increase was primarily attributed to the significant transaction mentioned earlier. The report states that the global economic environment continues to be uncertain, particularly due to elevated interest rates. Consequently, excluding the Brookfield-GIC transaction, deal volumes remained subdued in the quarter.

In terms of asset class wise funding, the commercial real estate sector experienced significant activity in Q1 FY24, mainly driven by the Brookfield-GIC transaction. The commercial real estate sector received 90 per cent of the funding in Q1 FY 2024, compared to 68 per cent in Q1 FY 2023. Meanwhile, residential real estate received 6 per cent of the funding, while industrial and logistics received 4 per cent.

Foreign investors continued to dominate investment activity in Q1 FY24, much like in Q1 FY23. They accounted for 94 per cent of the activity during this period, indicating their sustained interest and participation in the Indian market. In Q1 FY 2023, foreign investors had contributed 90 per cent of the activity.

Gagan Randev, Executive Director of India Sotheby's International Realty, attributed the slight decline in PE investment during the April-June quarter to the temporary slowdown and disruptions in the global economy. The rise in interest rates had severely affected investments in office assets in North America, resulting in market upheaval there. However, Randev expressed optimism that this phase would be transient, anticipating an increase in PE investment in the upcoming quarter.

During the first quarter of the current financial year (Q1 FY 2024), reported private equity (PE) deal activity in India, experienced a slight decline compared to the same period the previous year. In Q1 FY 2024, PE investments in real estate amounted to $1.9 billion, down from $2 billion in Q1 FY 2023.ANAROCK Capital's report FLUX for Q1 FY24 revealed that the overall deal numbers were boosted by a significant transaction totalling $1.4 billion, namely the Brookfield India RE Trust REIT - GIC transaction. This particular deal accounted for approximately 75 per cent of the total deal activity during the period.Shobhit Agarwal, MD and CEO of ANAROCK Capital, explained that excluding this deal, private equity activity remained subdued due to a high-interest rate environment and global uncertainties. Agarwal further mentioned that foreign investors tend to focus on equity investments in office assets, which already tilts the scale in favour of office assets in Indian real estate. The single large deal between the consortium of GIC and Brookfield REIT with Brookfield AMC further skewed the mix during the quarter.The average ticket size for deals in Q1 FY24 notably increased to $192 million from $100 million in FY 2023. This increase was primarily attributed to the significant transaction mentioned earlier. The report states that the global economic environment continues to be uncertain, particularly due to elevated interest rates. Consequently, excluding the Brookfield-GIC transaction, deal volumes remained subdued in the quarter.In terms of asset class wise funding, the commercial real estate sector experienced significant activity in Q1 FY24, mainly driven by the Brookfield-GIC transaction. The commercial real estate sector received 90 per cent of the funding in Q1 FY 2024, compared to 68 per cent in Q1 FY 2023. Meanwhile, residential real estate received 6 per cent of the funding, while industrial and logistics received 4 per cent.Foreign investors continued to dominate investment activity in Q1 FY24, much like in Q1 FY23. They accounted for 94 per cent of the activity during this period, indicating their sustained interest and participation in the Indian market. In Q1 FY 2023, foreign investors had contributed 90 per cent of the activity.Gagan Randev, Executive Director of India Sotheby's International Realty, attributed the slight decline in PE investment during the April-June quarter to the temporary slowdown and disruptions in the global economy. The rise in interest rates had severely affected investments in office assets in North America, resulting in market upheaval there. However, Randev expressed optimism that this phase would be transient, anticipating an increase in PE investment in the upcoming quarter.

Next Story
Infrastructure Transport

HMRTC to Extend Metro from Gurugram to Jhajjar

The Haryana Mass Rapid Transport Corporation (HMRTC) is progressing with plans to extend the Gurugram Metro from Basai to Bhadsa in Jhajjar, with the ridership survey expected to be completed by the end of January, according to HMRTC officials. In March, the authority had requested Railway India Technical and Engineering Services (RITES) to conduct a ridership survey, which will play a crucial role in finalising the project. The proposed route, covering 23.1 km from Basai to Bhadsa, will alleviate heavy traffic on this stretch. The ridership survey will determine whether the extension should p..

Next Story
Building Material

Siam Cement BigBloc Construction bags Tata Project’s order

SIAM Cement BigBloc Construction Technologies, a joint venture between Gujarat based BigBloc Construction and Thailand’s SCG International Corporation, has secured a work order from Tata Projects for supply and installation of AAC Panels for India’s first Semiconductor unit of Micron India in Sanand, Gujarat. The work order of approx. 2 lakh square feet is for supply and installation of 100 mm AAC panels for Micron India’s semiconductor factory at Sanand. The work order was finalized after several rounds of meetings, thorough due diligence, and factory visits, including review of mock-u..

Next Story
Infrastructure Urban

Zoomlion Releases World's Tallest Straight Boom Aerial Work Platform

Zoomlion Heavy Industry Science & Technology has released a series of groundbreaking aerial work platform (AWP) products, including the world's tallest straight boom aerial work platform, the ZT82J, with a height of 82.3 m. These innovative products further solidify Zoomlion's leadership in the AWP sector and underscore its commitment to global market development. The ZT82J marks Zoomlion's third instance of setting a world record in straight boom AWP following the 68-meter and 72-meter products. The 82.3-meter AWP boasts a platform amplitude of 34.1 meters, a maximum working load of 454 kilog..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000