Private equity investment in real estate grows 28% in the first quarter of FY23 : ANAROCK Capital

Real estate private equity investment recorded a 28% increase in the first quarter of FY23 compared to the first quarter of FY22, according to ANAROCK Capital’s latest FLUX report. Improving market sentiments, widespread vaccination coverage and the lifting of lockdown restrictions have helped this recovery.

Commenting on the same, Shobhit Agarwal, MD and CEO – ANAROCK Capital, said, “The recovery was mainly in the top 5 private equity deals, which accounted for 90% of the total value of private equity investments in the first quarter of fiscal year 23. There was a 53% increase in average ticket size in Q1 FY23 compared to Q1 FY22. Equity contribution to total private equity investment in Indian real estate increased to 87% in the first quarter of FY23, from 84% in the first quarter of FY22.”

Unlike Q1 FY22, deal activity in Q1 FY23 reverted to multi-city deals, instead of previously focusing on single-city deals. NCR captured the attention of private equity investors, with the highest inflow in the city at 48% in the first quarter of FY23 – a considerable increase from 1% in the first quarter of FY23 22.

Funding by asset class

In the first quarter of FY23, deployments by JV platforms in the commercial real estate sector increased significantly to 74%, particularly in Class A office spaces which are attracting very high investor interest. .

The Industrial & Logistics sector also shows increased potential, with the creation of a new JV platform between Ivanhoé Cambridge, Bain Capital & Macrotech Developers for an investment of 1 billion USD.

Domestic vs Foreign Funding

Foreign private equity investors showed increased confidence, with their contribution rising to 89% in the first quarter of FY23 from 83% in the first quarter of FY22.