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Bad News First: PE investments plunge
PE (private equity) investments in real estate came down by 32% in FY22 mainly due to the Delta-Omicron tag team assault on the economy, per this report.
Yeah? Tell Me More
38%, 22% and 14% of PE inflows were seen in the office, industrial and logistics and residential categories respectively.
FY22 saw average deal sizes plunging by 42%, though they managed to stay above FY18 levels. Investments however doubled to USD600 million in FY22 from domestic funds, while equity stayed at 80% of total PE investments.
What Caused This?
🔽 Investors switched emphasis to individual realty assets.
🔼 Single-city transactions gained traction.
🔼 Domestic funds showed more confidence in the market.
🔽 Average ticket sizes went back to USD93 million (akin to FY2019) with portfolio deals coming down.
🔽 Many deals went into the next fiscal owing to delays.
Now The Good Stuff: Institutional investments reach record USD1.1 billion
This report confirms institutional investment doubling to USD1.1 billion in Q1 2022 in comparison to Q1 2021 (USD0.5 billion). Big-ticket office sector deals led to higher investments in the quarter.
Main developments
📈 Foreign and domestic players accounted for 70% and 30% of inflows.
📈 Mumbai led with 25% of inflows.
📈 Retail drew 23% of inflows.
📈 Industrial and logistics drew USD0.2 billion (16%).
📈 65% deals were multi-city investments.
📈 Residential got USD15 million or 1%.
While domestic investors regain their mojo, e-commerce, data centres, warehousing, logistics, and office space continue to propel growth.