Private equity (PE) investments in Indian real estate witnessed a notable transformation during the first nine months of FY25. Despite a decline in the number of deals, the total investment value rose to $2.82 billion, a 6% year-on-year increase, according to ANAROCK Capital’s FLUX – 9M FY25 edition. The average deal size surged by 32.5%, climbing from $88.5 million in 9M FY24 to $117.3 million in 9M FY25, reflecting a shift toward larger, high-value transactions.
Key Insights from the Report
- Decline in Deal Numbers: The total number of PE deals dropped from 30 in 9M FY24 to 24 in 9M FY25.
- Increase in Average Deal Size: The average deal size grew to $117.3 million, driven by large-scale transactions like the Reliance-ADIA/KKR deal worth $1.54 billion.
- Sectoral Dominance: The industrial and logistics sector captured 62% of total investments, boosted by the Reliance-ADIA/KKR and Blackstone-LOGOS deals.
Breakdown of Asset Classes
The industrial and logistics sector emerged as the leader, followed by the residential and office sectors.
| Asset Class | 9M FY24 | 9M FY25 |
|---|---|---|
| Industrial & Logistics | 13% | 62% |
| Residential | 12% | 15% |
| Office | 69% | 14% |
| Mixed-Use/Other | 6% | 9% |
Top PE Deals
The top 10 PE deals accounted for 93% of total transactions. Key deals included:
- Reliance-ADIA/KKR deal (Logistics, $1.54 billion)
- GIC-Xander deal (Commercial, Hyderabad, $258 million)
- Blackstone-LOGOS deal (Logistics, $204 million)
Funding Trends
- Hybrid Deals Lead: Hybrid transactions dominated, accounting for 55% of investments, compared to 24% for debt and 21% for equity.
- Domestic vs. Foreign Funding: Foreign investors retained a majority share at 82%, while domestic funding increased to 18%.
Sectoral Highlights
- Residential Sector: PE investments in residential projects rose to 15% in 9M FY25 from 12% in 9M FY24, reflecting strong housing demand.
- Commercial Sector: This segment faced challenges due to geopolitical concerns and high interest rates, though operational performance remains robust.
- Industrial & Logistics: Continued demand from e-commerce, manufacturing, and 3PL supported growth in this sector, with a shift toward Grade-A properties.
Shobhit Agarwal, CEO of ANAROCK Capital, noted, “The Indian real estate sector continues to attract significant PE investments, especially in logistics and warehousing. While challenges persist in commercial real estate, the anticipated reduction in interest rates in 2025 could drive renewed interest across asset classes.”
With increased demand for quality assets and evolving investor strategies, the PE landscape in Indian real estate is poised for further growth in the coming quarters.
Also Read: ahmedabad real estate market
