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New Delhi: Private equity (PE) investment in real estate grew 40 per cent to USD 2.8 billion during the April-September period of the current fiscal, with heavy inflows from foreign funds, especially in office assets, a report said. stated in. according to anarock According to the report, the PE investment in the corresponding period of last fiscal stood at US$ 2 billion.
“Investor’s Confidence” Indian real estate As a reflection of the improving condition of the Indian economy and real estate, it continues to grow industry,” Told Shobhit AgarwalMD and CEO of Anarock Capital, which is part of the real estate advisory Anarock.
According to the report, investments from foreign investors contributed about 78 per cent of the total inflows in the first half of this fiscal, reflecting their strong faith in Indian real estate.
Domestic investment grew by 45 per cent in April-September of 2022-23 compared to the year-ago period, while foreign investment grew by 36 per cent in total capital inflows.
The top 10 deals accounted for 86 per cent of the total value of PE investments in the first six months of this fiscal, compared to 80 per cent in the first half of FY22.
Among the various asset classes in the real estate sector, Agarwal said the office market has seen a “meaningful improvement” in demand.
The PE investment in office assets during April-September of the current financial year was USD 1,862 million – almost equal to the investment in the entire previous financial year.
Due to the COVID-19 pandemic and the lockdown, the office market was adversely affected during the 2020 and 2021 calendar years. The adoption of work from home reduced the demand for office space.
The advisory added that the demand for housing in the post-pandemic times has also remained healthy, with the result that the residential asset class is the second largest among all asset classes, with USD 372 million funneled in the first half of FY23 Is.
Across all geographies, Anarock said PE investments have come in higher in Delhi-NCR.
“NCR witnessed a strong growth in capital inflows into PE – from USD 181 million in H1 (April-September) FY22 to USD 590 million in H2 (October-March) FY ’22 in H1 Up to USD 942 million. FY’23,” Anarock said, adding that the inflow was driven by joint venture platform deals such as Brookfield with Bharti Enterprises and Bain Capital with Tark.
Commenting on the trend, Rajan Bandelkar, President, Realtors’ body NAREDCO said that the Indian real estate sector has so far navigated itself very well amid the pandemic and the current global economic concerns.
“The increase in private equity investment is both evidence and a strong signal to the growth prospects of the sector and the confidence of the investor community,” he said.
Bandelkar listed that lifting of COVID restrictions, improving market sentiments and resumption of economic activities have been the key factors for growth in investment.
Pradeep Agarwal, founder and president, realty firm Signature Global, said the real estate sector, be it residential or commercial, has performed well over the past one year.
Agarwal, whose company is into affordable homes development, said, “Domestic and global investors are chasing opportunities to invest in the Indian real estate market. We expect this trend to continue.”
Anarock Capital’s report said that out of USD 2.8 billion inflows by PE firms in April-September 2022, around USD 2.2 billion was in the form of net equity and the rest as structured debt.
The advisory said investments in office, residential and industrial and logistics properties will continue.
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