India has seen a return of investor confidence following a significant dip in investment volume when the pandemic hit in 2020, according to a report from real estate service company Anarock Property Consultants.
Private equity real estate investment in India recorded an 87 percent increase in the first half of financial year 2023, compared with the same period in financial year 2021. Anarock defines a financial year as April 1-March 31. This represents a strong bounce back following a 63 percent drop in transaction volume from H1 FY 2020 to H1 FY2021.
Shobhit Agarwal, managing director and chief executive officer at Anarock Capital, told PERE the overall underlying demand has increased post-pandemic, which has led to stronger confidence among investors.
Half of the top 10 transactions in H1 FY 2023 were in the office sector, while the top 10 deals accounted for 86 percent of the total value of private equity investments in the country. CPPIB’s $700 million purchase of an office portfolio from Tata Realty & Infrastructure and Brookfield Asset Management’s $660 million buy of an office asset from Bharti Enterprises were the two biggest transactions in H1 FY 2023. While office investment grew by 49 percent in H1 FY 2023, compared with H1 FY 2022, investment in industrial and logistics fell by 42 percent over the same period.
Post-pandemic migration of the workforce back to the office is a key driver for the uptick in investment in Grade A office assets with quality tenants, according to Agarwal. Meanwhile, he expects the dip in logistics demand to be temporary, with investment in the sector continuing to grow at a rapid pace. “Industrial, logistics and warehousing as a space is growing and is a sunshine sector. There have been many joint venture platforms created as well to aid investment in this sector,” he pointed out.
Here are three key charts showing the findings from the report: