In the retail subsegment, Indian real estate is thriving due to economic growth, the report said
New Delhi: Private equity (PE) investments in the real estate sector registered a decline of approximately 26% in 9 months of FY24 as both foreign and domestic investors reported lower activity, according to ANAROCK Capital.
A report titled Flux on 9 months of FY24 by ANAROCK Capital said that the activity from foreign investors remained subdued for most of this period due to global geopolitical uncertainties and a high interest rate environment.
Domestic alternative investment funds (AIFs) have seen lower activity levels as their favoured asset class and residential real estate debt witnessed lower demand for high-cost funds, said Shobhit Agarwal, managing director and chief executive officer of ANAROCK Capital. “Strong residential pre-sales and an accommodative stance by state-owned banks have led to reduced demand for capital from the more expensive alternative investment funds (AIFs),” he said.
In the retail subsegment, Indian real estate is thriving due to economic growth, the report said.
Key players in the nation’s mall development arena like DLF, Prestige and Phoenix are aggressively pursuing expansion. This surge in capital allocations aligns with the expansion strategies adopted by leading retailers, resulting in a substantial uptick in store numbers, it said.
Rentals are expected to go up, as economic buoyancy and robust consumer sentiment have led to healthy demand and trading densities for retail assets.
It said that the share of the top ten deals was 87% of the total value of PE investments in 9 months of FY24 as compared to 76% in 9M FY23.
The average ticket size 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.
