Real Estate News: In the Charts: Private equity investment in real estate fell 32% in FY22 to $4.3 billion | India Business News

NEW DELHI: private equity investments in real estate declined 32% in fiscal year 2022 to $4.3 billion from the prior year period, in part due to the destructive effect of the second wave of the pandemic, which resulted in multiple lockdowns in various parts of the country, and severe economic disruption in nearly every industry, according to a report by Anarock Capital.

FY22 also saw a huge 42% drop in average transaction ticket size, although it was still above FY18 levels.
The decline in note sizes is largely due to investors’ return to individual assets, as opposed to their preference for portfolio transactions in FY21, the report notes.
The lack of portfolio agreements led to a reduction in the average note size to $93 million – back to FY19 levels, but still above FY18 levels
“Equity continues to account for around 80% of total private equity investment in Indian real estate. The commercial sector attracted the highest investment in FY22 (38%), followed by the industrial sector and logistics (22%), with the residential sector coming in at just 14%,” said Shobhit Agarwal, MD and CEO – ANAROCK Capita.
National fund investments more than doubled from $290 million in FY21 to $600 million in FY22.
Unlike FY21, investors in FY22 favored single-city deals over multi-city deals, resulting in an almost 70% reduction in the share of multi-city deals over the course of the year. EX22.
The commercial sector attracted the highest investment in FY22 (38%), followed by industrial and logistics (22%) and residential (14%).
Domestic private equity investors showed greater confidence; and their contribution increased from 5% in FY21 to 14% in FY22, still above FY18 levels.
Key points to remember:

  • Private equity investor interest in Class A office assets with quality tenants remained highest; owners expected to change hands in coming years
  • Industrial & Logistics has become the second most preferred asset class after office; and is expected to grow significantly in the coming years
  • Data center as an asset class is the new emerging sector
  • The residential real estate sector continued to benefit from steady tailwinds from accelerating consumer demand for home ownership, coinciding with near-historic low mortgage rates

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