News
PE inflows in realty up 19 pc in FY21


An ANAROCK report
Against all expectations, Indian real estate recorded its highest-ever PE investments since FY16. ANAROCK Capital’s ‘Flux – FY20-21 Market Monitor for Capital Flows‘ highlights that despite COVID-19, more than USD 6.27 billion were pumped into the sector in FY21, as against USD 5.8 bn in FY20 – an increase of 19% in one year.
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 approx. USD 4,583 million invested via portfolio deals in multiple cities
The average ticket size of PE deals rose by 62% in the fiscal year – from USD 110 Mn in FY20 to USD 178 Mn 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.
Though FY21 was an unprecedented year due to the pandemic, foreign PE funds showed much optimism for India. As much as 93% of the total PE investments pumped into Indian real estate was by foreign investors. In actual terms, investments by foreign PE funds almost doubled from USD 3 Bn to USD 5.8 Bn in FY21. In contrast, domestic PE funds invested merely USD 300 Mn compared to USD 420 Mn in FY20.
“Alongside, the successful REIT listings have provided a good monetising option for PE investors, leading to a stronger demand for good quality rental earning office and retail assets,” he says. “Good entry valuation coupled with the option to accumulate a healthy mix of portfolio assets have also driven this surge in foreign PE investments. During the year, PE funds like Blackstone and Brookfield have added a lot of assets to their existing portfolios, while others have takeover loan portfolios of NBFCs.”
Among other significant trends, the share of asset classes like commercial, retail and hotel has been very good. While the asset class-wise bifurcation shows lower percentage, when considered along with portfolio deals (where bifurcation is not available), the share of these assets classes is strong. Nearly 66% of the total inflows (USD 6.27 bn) in FY21 was across portfolio deals in multiple asset classes. In contrast, in FY20, out of the total USD 5.28 Bn total inflows, just 8% of the total comprised of portfolio deals.
The top 10 deals alone contributed nearly 78% of the total PE inflows in FY21 as against 67% in FY20:
TOP 10 DEALS IN FY 2021 | ||||
Capital Provider | Recipient | Location | Asset Class | Deal Amount (USD Mn) |
Brookfield | RMZ | Multiple | Portfolio | 1,984 |
Blackstone | Prestige Estates | Multiple | Portfolio | 996 |
Farallon Capital & SSG Capital | Edelweiss | Multiple | Portfolio | 400 |
Apollo Global Management | Piramal Capital | Multiple | Portfolio | 350 |
Oak Tree | Indiabulls HFL | Multiple | Portfolio | 297 |
Carlyle | Nxtra Data | Multiple | Data Centre | 235 |
Ascendas | Cybercity Developers | Bengaluru | Commercial | 195 |
Varde Partners | Phoenix Group | Hyderabad | Commercial | 155 |
GIC | Phoenix Group | Hyderabad | Commercial | 142 |
DCCDL* | Hines | NCR | Commercial | 105 |
* DLF Cyber City Developers Ltd. (DCCDL) is a JV between DLF & GIC |
Other Notable Trends
- Among the foreign PE investors that remained major contributors for overall PE inflows in India, Canada and US-based investors pumped in more than 50% of the total foreign PE investments in FY21.
- REITs enjoyed wider acceptance in the country; healthy fund raising continued in public market, REIT sizes – USD 608 Mn Mindspace & USD 514 Mn Brookfield India REIT
- The Industrial & Logistics sector had strong investor support. Key emerging trends in this sector – rise of automation, urban multi-level warehousing, de-centralization, increasing business consolidation, and high demand for Grade A assets.
- Data centres are becoming the new sunrise sector, gaining more attention from PE investors and strategic investors
- Last-mile funding gaining momentum – SWAMIH fund and various foreign funds actively evaluating various options
- Stressed asset resolution started seeing traction; NCLT cases started to move towards conclusion
-
Guest Column4 weeks ago
Vertex launches its largest project, VIRAAT
-
Guest Column4 weeks ago
Planning to Invest: Consider these 5 alternate assets to put your money
-
Guest Column4 weeks ago
In 2022 PE investments in Indian real estate at $3.4 bn, at par with 2021: Savills
-
Guest Column4 weeks ago
Mirae Asset Acquires Grade-A Warehousing Space in India
-
Guest Column4 weeks ago
Propdial in talks to raise Rs 25 Crore
-
Events4 weeks ago
Celebrations at Vegas Mall, Dwarka
-
Guest Column4 weeks ago
TARC Tripundra achieves Rs 350 cr sales
-
Report3 weeks ago
After 2018, 2019, highest number of project registrations in 2022 in U.P. RERA