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Private Equity Investments In Real Estate Sector Decline By 32% In FY22: Report

Private Equity Investments In Real Estate Sector Decline By 32% In FY22: Report

According to the report, the average deal ticket size slumped 42 per cent from $161 million in FY2021 to $93 million in FY2022 as investors focused on shifting back to individual assets as opposed to their preference for portfolio deals earlier.   

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Real Estate

The real estate private equity (PE) investment witnessed a decline of 32 per cent in FY2022 compared to FY2021, owing to the multiple lockdowns ensued by the second wave of the Covid-19 pandemic and economic disruptions in almost all sectors of the industry, according to a report by the realty firm ANAROCK. 

According to the report, the average deal ticket size slumped 42 per cent from $161 million in FY2021 to $93 million in FY2022 as investors focused on shifting back to individual assets as opposed to their preference for portfolio deals earlier.   

The commercial sector attracted 38 per cent of investment in FY22, which is the highest as compared to industrial and logistics, and residential. Investments in the industrial and logistics sector stood at 22 per cent in FY2022, whereas that in the residential sector stood at 14 per cent. 

As per the report, domestic investment doubled in size from $280 million in FY2021 to $600 million in FY2022. Moreover, the multicity deals were reduced by nearly 70 per cent from $4,573 million in FY2021 to $1,380 million in FY2022, as investors preferred single-city deals. 

Shobhit Agarwal, MD & CEO, ANAROCK Capital, said, "Equity continues to remain around 80% of the total PE investments in Indian real estate. The commercial sector attracted the highest investment in FY22 (38%), followed by the Industrial & Logistics sector (22%), with Residential clocking in at a mere 14%. Meanwhile, investments by domestic funds doubled in size in FY22 - from $290 Mn (FY21) to $600 Mn (FY22)."

"The increasing confidence of domestic funds reflects the return of overall positivity after a harrowing year of pandemic disruption and uncertainty," he added. 

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