More than half of private equity investments in commercial real estate were in NCR, report says

• NCR commercial real estate emerged as the top PE favorite as $992 million in investments were made in the first half of FY23.
  
• Residential demand has remained healthy at $372 million in H1FY23, says a Anarock report.
  
• Another bullet needed The share of investment by foreign investors remained around 78% in H1FY23.
  

India Inc. is returning its employees to work, which has sparked private equity investors excited about the prospects of commercial real estate, according to a report from real estate services firm Anarock Capital.

In the first half of FY23, private equity investments in the space totaled 1,862 million. The average ticket size of an investment also grew from $75 million in H1 FY22 to $121 million in H1 FY23.

“The commercial real estate space is preferred by private equity investors. The investment share of commercial assets in the total real estate pie has increased from 18% in H1 FY22 to 67% in H1 FY23,” said Shobhit Agarwal, MD & CEO, Anarock Capital.

NCR beats India’s financial capital


Most of this investment flowed to NCR, which saw a 61% increase — in H1 FY23, investments were $992 million — that’s nearly half of all private equity investments in commercial real estate.

Chennai is the next favorite for private equity with investments worth $257 million, followed by Mumbai ($156 million), Hyderabad ($129 million), Bengaluru ($15 million) and Pune ($5 million).

Demand for residential real estate remains strong after pandemic


Residential demand has remained healthy at $372 million in H1 FY23, resulting in the second most preferred sector of all asset classes.

“Post-pandemic demand and confidence in the commercial real estate sector have seen a meaningful recovery,” Agarwal said.

“Investor confidence in Indian real estate is steadily increasing thanks to the improvement in the Indian economy, despite global headwinds and the continued robustness of the real estate sector,” said Anarock.

Domestic investment increased by 45% and foreign investment increased by 36% of total capital inflow into Indian real estate in H1FY23 compared to H1FY22.

The share of investment by foreign investors remained at around 78% in H1 FY23, reflecting continued global confidence in the Indian real estate sector, Anarock revealed.

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