Private Equity (PE) Investments in real estate declines by 26% in the first 9 months of FY24 as both foreign and domestic investors reported lower activity, according to Anarock Capital’s FLUX report.
Activity from foreign investors remained subdued for most of this period due to global geopolitical uncertainties and a high interest rate environment, the firm said.
Shobhit Agarwal, MD & CEO - Anarock Capital, said, “Domestic Alternate Investment Funds (AIFs) have seen lower activity levels as their favoured asset class – residential real estate debt – witnessed lower demand for high-cost funds.”
“Strong residential pre-sales and an accommodative stance by state-owned banks have led to reduced demand for capital from the more expensive AIFs,” he added.
According to the report the average ticket size of investment has marginally increased to $95 million in 9M FY24 from $91 million in 9M FY23.
“This is largely due to a large deal in which Brookfield India Real Estate Trust REIT and Singapore’s sovereign wealth fund GIC together acquired two commercial assets - one in Mumbai and the other in Gurugram, NCR, from Brookfield Asset Management with an enterprise value of $1.4 billion,” the firm said.
“Investments by foreign investors have increased to 86% in 9M FY24 as compared with 79% in 9M FY23,” Mr. Agarwal said adding “Correspondingly, domestic investments decreased to 14% of the total capital inflows into Indian real estate in 9M FY24 - at $360 million, compared with $717 million in 9M FY23.”
