Real estate sector records highest PE investments since FY16

Unlike earlier, FY21 saw private equity investors focus majorly on portfolio deals across multiple cities and assets, rather on specific projects or cities.

Covid-19 failed to put brakes on private equity (PE) investments into Indian real estate, which recorded its highest PE investments since FY16.

More than $6.27 billion were put into the sector in FY21 against $5.8 billion in FY20, registering an increase of 19%.

Unlike earlier, FY21 saw private equity investors focus majorly on portfolio deals across multiple cities and assets, rather on specific projects or cities. Such portfolio deals constituted 73% of the overall share, with approximately $4,583 million invested via portfolio deals in multiple cities, data from Anarock Property Consultants show.

The average ticket size of PE deals rose by 62% in the fiscal – from $110 million in FY20 to $178 million in FY21. Both structured debt and equity witnessed strong growth during the year at 84% and 15%, respectively. Structured debt was largely towards portfolio deals instead of project-level assets. The top 10 deals alone contributed nearly 78% of the total PE inflows in FY21 against 67% in FY20.

Shobhit Agarwal, MD & CEO – Anarock Capital, said: “Foreign funds are evidently very upbeat about India. High-grade rental-generating assets have attracted foreign investors in a big way during the year. Moreover, India has a strong underlying demand for office space with quality workforce and average rentals available at less than a dollar per sq ft per month.”