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Real estate private equity investments see 40% jump during April-September period, says report

Real estate private equity investments see 40% jump during April-September period, says report

Real estate private equity investments see 40% jump during April-September period, says report
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By Nishtha Pandey  Oct 10, 2022 4:12:57 PM IST (Published)

Additionally, residential asset classes remained popular post-pandemic, with $372 million going into them in the first half of this fiscal, making them the second-most preferred asset class. A total of $378 million and $390 million were invested in PE during the first and second halves of last fiscal (2021-22), respectively..

Real estate private equity (PE) investments registered an increase of 40 percent in the first half of the current financial year on the back of an improvement in the Indian economy, and the continued robustness of its real estate industry, said Anarock Capital’s latest FLUX report.

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Foreign PE investors displayed increased confidence, with their contribution increasing to 78 percent in the first half of the 2022-23 fiscal. Domestic investments increased by 45 percent and foreign investments increased by 36 percent of the total capital inflows in Indian real estate in this period, compared to the corresponding period the previous fiscal, added the report.
Additionally, residential asset classes remained popular post-pandemic, with $372 million going into them from April to September, making them the second-most preferred asset class. A total of $378 million and $390 million were invested in PE during the first and second halves of the 2021-22 fiscal, respectively.
The PE investments in office assets stood at $1.87 billion during April-September, nearly equal to the investment in the whole of last financial year.
The office market was adversely hit during the 2020 and 2021 calendar years, because of the COVID-19 pandemic and consequent lockdowns. Adoption of work-from-home reduced office space demand.
The investment share of commercial space in the total real-estate sector for April-September 2022 stood at 67 percent showcasing an increase of 18 percent from the corresponding period a year ago.
Across geographies, Anarock noted that PE investments were higher in the Delhi-NCR region.
"NCR witnessed a strong increase in capital inflows in PE — from $181 million in H1 (April-September) of FY22 and $590 million in H2 (October-March) FY22, to $942 million in H1 of FY23," said Shobhit Agarwal, MD & CEO, Anarock Capital.
In addition, the report noted that out of the $2.8 billion inflow by PE firms in April-September 2022, nearly $2.2 billion was in the form of pure equity and the rest was structured debt.
There will be continued investments in office, residential, and industrial & logistics assets, added Anarock's report.
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