Private equity investment in real estate down 4% to USD 2.3 billion in Apr-Sep: Anarock

Private equity investments in the Indian real estate sector declined 4% to USD 2.3 billion in the first half of this fiscal year due to lower inflow in office assets, according to Anarock.

Real estate consultant Anarock noted that the total number of deals declined to 17 in April-September this year from 24 in the corresponding period of the preceding year.

Shobhit Agarwal, MD & CEO of ANAROCK Capital, said, "Private equity investments in offices are primarily driven by foreign investors, which have tapered down due to global factors such as geopolitical tensions and elevated interest rates."

However, he added that the aggregate numbers and the dominance of foreign investors in the Indian real estate remained largely stable due to the ADIA/KKR investment in the Reliance Retail warehousing assets.

Private equity investments stood at USD 1.2 billion in the first half of 2020-21 fiscal; USD 2 billion in H1 2021-22; USD 2.8 billion in H1 2022-23; USD 2.4 billion in April-September 2023-24; and USD 2.3 billion in H1 2024-25.

The average deal size has risen 23% year-on-year, primarily driven by the Reliance-ADIA/KKR warehousing deal which accounts for 67% of the total investments made in the first half of FY25.

Out of the total private equity investments in the period under review, 87% came from foreign investors, Anarock said.

During the period, industrial and logistics assets attracted 67% of the total investments, significantly surpassing both the office and residential sectors (which attracted 17% each).

While private equity investments in the office sector declined by 79%, the industrial and logistics sector saw a substantial 378% increase in investments compared to the same period in the previous financial year.