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 than on specific towns or projects. 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 robust growth during the year at 84% and 15%, respectively. Structured debt was essentially 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 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 a quality workforce and average rentals available at less than a dollar per sq ft per month.