In 1H FY23, it has shifted to other regions. NCR witnessed a strong increase in capital inflows in PE - from USD 181 Mn in 1H FY22 and USD 590 M in 2H FY22 to USD 942 Mn in 1H FY23. There was a 60% rise in investments in 1H FY23 in NCR compared to 2H FY22 due to JV platform deals like Brookfield + Bharti Enterprises and Bain Capital + TARC.” Private investment in Indian real estate sector has seen a year-on-year increase, which, industry analysts claim, is a sign of both trust and robust health of Indian economy and the sector. Analysis by the real estate advisory firm Anarock has reported a 40 per cent increase in such investments in the first half of financial year 2022-23 as compared to the same time period of financial year 2021-22.
The report talks of $2.8 billion as the PE investment in the H1FY2023, which was $2.0 billion in the same period last fiscal. Notably, the investments are still low as compared to the $4.1 billion figure the sector had reported in first half of 2019-2020 fiscal. As compared to the last fiscal, top 10 deals accounted for 86 per cent of the total investments. Last fiscal, the top 10 deals had accounted for 80 per cent of the total investments. The average ticket size of investments have also seen an upward rise from $75 million in the first half of last fiscal to $121 million in the first half of this financial year. Majority of the deals have been in multiple cities and in joint ventures.
Mumbai Metropolitan Region, which was the major focus of investments last fiscal, has now been replaced by investments in other regions. National Capital Region (NCR) has seen 60 per cent of the investments in the first half of FY2023. Funding in terms of equity rather than debt has always been a preference, a trend which continued this fiscal also.
Around 67 per cent of the investments has gone towards commercial deals which marks the return to office or hybrid style of work as the pandemic wanes. Investments in residential projects was 13 per cent of the fundings. Investment in retail remained subdued with physical shopping yet to pick up.
Shobhit Agarwal, managing director and chief executive officer, ANAROCK Capital, said, “Investment focus by PE investors in 1H & 2H FY22 was markedly strong in MMR. In 1H FY23, it has shifted to other regions. NCR witnessed a strong increase in capital inflows in PE – from USD 181 Mn in 1H FY22 and USD 590 M in 2H FY22 to USD 942 Mn in 1H FY23. There was a 60% rise in investments in 1H FY23 in NCR compared to 2H FY22 due to JV platform deals like Brookfield + Bharti Enterprises and Bain Capital + TARC.”