PE investments in real estate surge 6% to $2.82 billion in Apr-Dec 2024 despite drop in deals: Report

Private equity (PE) investments in the Indian real estate sector rose by 6% year-on-year to $2.82 billion in the April-December period of FY25, according to a report by real estate consultancy Anarock.

Shobhit Agarwal, MD and CEO of Anarock Capital, noted that the total PE investment was led by the Reliance-ADIA/KKR warehousing deal, which was worth $1.54 billion.

The logistics and warehousing sector accounted for 62% of the total inflows, significantly higher than the office (14%) and residential (15%) sectors.

"This deal, along with the USD 204 million Blackstone-LOGOS equity deal, significantly boosted the logistics and warehousing sector, which captured 62 per cent of total investment," Agarwal said.

The total number of PE deals, however, fell to 24 in the first nine months of FY25 from 30 in the same period a year earlier.

Despite this, the average deal size surged by 32.5%, primarily due to large transactions such as the Reliance-ADIA/KKR warehousing deal.

The top 10 deals, including the Reliance-ADIA/KKR transaction and Blackstone-LOGOS warehousing deal, collectively accounted for 93% of the total investment value during the nine-month period.

Bengaluru and Hyderabad led the city-specific transactions, contributing 11% and 10%, respectively, while multi-city deals, led by the Reliance-ADIA/KKR transaction, comprised over 62% of total deals.

The report also highlighted a rising share of PE investments in the residential sector, which grew to 15% from 12% in the year-ago period. However, stronger pre-sales and increased participation from public sector banks in construction finance are expected to reduce reliance on high-cost PE funding, prompting investors to explore earlier-stage projects or special situation opportunities.