Private equity investments into real estate register 26% decline in nine months of FY 2024

Private equity investments in real estate registered a decline of approximately 26% in nine months of FY24 as both foreign and domestic investors reported lower activity. Activity from foreign investors remained subdued for most of this period due to global geopolitical uncertainties and a high interest rate environment, finds ANAROCK Capital’s FLUX report for 9M FY24.

Private equity investments in real estate registered a decline of approximately 26% in nine months of FY24 as both foreign and domestic investors reported lower activity.(Pixabay) Movement of Capital Inflow; MMR leads Multi city transactions increased sharply during 9M FY24, dominated by the Brookfield India REIT and GIC.

Mumbai Metropolitan Region led the transaction league tables in city specific transactions, with the region reporting investments of $ 694 mn in 9M FY24, against $ 375 mn in 9M FY23. Wrap up the year gone by & gear up for 2024 with HT! Click here Equity vs Debt Funding PE investors continue to prefer equity investments, which is visible from the fact that the PE share stood at a healthy at 84%.

Also Read: Year Ender 2023: PE investments in Indian real estate decline by 44% to $3 bn so far this year Asset Class wise Funding The commercial real estate sector has seen an increased share in PE deals in 9M FY24, driven by a single large transaction and reduced activity in residential real estate.

"Domestic Alternate Investment Funds 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," said Shobhit Agarwal, MD and CEO ANAROCK Capital.

Top 10 PE Deals in 9M FY24 The share of the top 10 deals was 87% of the total value of PE investments in 9M FY24 as compared to 76% in 9M FY23, said the report. Average Ticket Size The average ticket size has marginally increased to $95 mn in 9M FY24 from $ 91 mn 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 bn, the report said.

Also Read: Indian real estate market size estimated to jump over 12 fold to USD 5.8 trillion by 2047: Report Domestic vs Foreign Funding "Investments by foreign investors have increased to 86% in 9M FY24 as compared to 79% in 9M FY23," said Shobhit Agarwal. “Correspondingly, domestic investments decreased to 14% of the total capital inflows into Indian real estate in 9M FY24 at $360 mn, compared to $717 mn in 9M FY23,” he added.

Unlock a world of Benefits with HT! From insightful newsletters to real time news alerts and a personalized news feed – it's all here, just a click away! Login Now! SHARE THIS ARTICLE ON Share this article Share Via Copy Link ABOUT THE AUTHOR HT News Desk Follow the latest breaking news and developments from India and around the world with Hindustan Times' newsdesk.

From politics and policies to the economy and the environment, from local issues to national events and global affairs, we've got you covered. ...view detail Real Estate News.