PE investment up 58% in NCR realty in first 3 quarters of FY23: Study

PE funding in Indian real estate up 3% annually, demand for commercial and residential properties continues: ANAROCK Capital

Real estate business in the National Capital Region (NCR) this financial year has got more interest from private equity players than the Mumbai Metropolitan Region (MMR), said a report on Tuesday.

Private equity (PE) players invested $1,215 million in NCR real estate in the first nine months (9M) of Financial Year 2022-23 (FY23) compared to $771 million in the corresponding period last financial year, said ANAROCK Capital’s Flux report. “This was a 58 per cent yearly jump in total PE inflows in the (NCR) region,” it said about a place comprising Delhi and cities around it.

In MMR, total PE investments in FY23 stood at $224 million as against $ 574 million in the corresponding period of the previous financial year.

Chennai, which accounted for 1 per cent share of total PE inflows in 9M FY22, saw its share rise to 8 per cent in 9M FY23. Investments worth $268 million were registered in Chennai in 9M FY23 compared to $ 37 million in the same period last financial year, the report said.

Overall, PE funding in Indian real estate increased 3 per cent annually at $3.4 billion in 9M FY23 compared to $3.3 billion in the corresponding period in FY22.

The top 10 deals accounted for 76 per cent of the total value of PE investments in 9M FY23, compared to 72 per cent in 9M FY22. The average deal ticket size rose from $ 82 mn in 9M FY22 to $ 91 MN in 9M FY23.

Demand for commercial space has resumed and confidence in the residential sector is high, said Shobhit Agarwal, managing director and chief executive officer of ANAROCK Capital.

In the retail segment, PE investments have remained subdued but are expected to gain momentum with physical shopping levels returning, he added.

“Thanks to the buoyant manufacturing sector, favourable government policies and the booming 3PL sector, high momentum is expected in the Industrial & Logistics sector in the future,” Agarwal said.

PE investors prefer equity, which is visible from the fact that its share continues to be at 77 per cent.

In terms of asset class-wise funding, the commercial real estate sector has witnessed increased capital inflows via PE investments, accounting for the highest market share of 55 per cent in 9M FY23 as compared to 33 per cent in the same period in FY22, the report said.

Top 10 PE Deals 

Capital Provider	Recipient	Deal amount (in $ mn)
CPPIB	TRIL	700
Brookfield	Bharti Enterpirse	660
HDFC Capital Advisors	Shapoorji Pallonji	194
Axis AMC	Tishman Speyer	188
CapitaLand Investment	CapitaLand Development	177
Bain Capital	TARC (Anant Raj)	175
Brookfield	IL&FS	137
Brookfield	L&T Metro Rail	129
Credit Suisse	Adani Properties	101
Blackstone	Vertical Warehousing	88
Source: ANAROCK Capital

Source: ANAROCK Capital