FY24 Annual Edition’ reveals a significant decline in the aggregate value of private equity deals within the Indian real estate sector. This dip, which amounts to nearly 30% compared to FY20, is attributed to reduced foreign investor participation due to global macro-economic factors and geopolitical uncertainties according to Shobhit Agarwal, the managing director and CEO at Anarock Capital.
Agarwal highlighted the shift in investor demographics, indicating a decrease in the share of foreign capital to 65% in FY24 from 78% in FY20, while domestic investors now contribute 29% to the total capital inflows, showing a substantial increase from the mere 8% in FY20. This shift in investor focus is further emphasized by a report from Vestian CEO Shrinivas Rao, noting the enthusiasm of domestic investors towards India's growth narrative and their continued interest in real estate investments.
The Anarock report also delves into the sector preferences of PE investors, with a keen interest in commercial office spaces accounting for 57% of the value share of PE transactions in FY24. This was followed by investments in residential properties at 28% and industrial and logistics at 10%. Agarwal pointed out a yearly decline of 17% in residential real estate investments by value, attributing this to an exceptionally high base in FY23 when investments had doubled compared to previous years.