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The aggregate value of PE deals in Indian real estate rose in Q1 FY25, primarily driven by a single large investment in warehousing assets of Reliance Retail. ANAROCK Capital's FLUX report for Q1 FY25 finds that the sequential increase was an impressive 113%; however, the Y-o-Y increase was relatively modest at approx.14% - underscoring the inherent lumpiness in the reported transactions.
Shobhit Agarwal, MD & CEO – ANAROCK Capital, says, “The top private equity deal – for approx. USD 1.5 Bn between Reliance-ADIA-KKR – accounted for a whopping 71% of the total PE deals in Q1 FY25. In Q1 FY24, the top PE deal by Brookfield India RE Trust and GIC was approx. USD 1.4 Bn and accounted for a marginally higher 74% share of the total PE deals.”
On a moving average basis, activity by foreign investors was lower than levels witnessed previously, despite the current spike in deal value. This is due to an overall weak macro-economic environment, and elevated geo-political risks.
Multi-city deals continued to steal the limelight during this quarter, driven by the Reliance-ADIA-KKR deal accounting for 71% of overall deals value in Q1 FY25. Besides this large deal, the current quarter also witnessed contributions from Hyderabad, Bengaluru, Pune and MMR.
“Pure debt and pure equity transactions took a backseat during the quarter in light of the Reliance – ADIA – KKR transaction in the deal table,” says Aashiesh Agarwaal, SVP - Research & Investment, ANAROCK Capital. “According to available data, this transaction is a combination of senior debt, quasi-equity or subordinate debt, and equity infusion.”
While transactions in Q1 FY24 witnessed a marked skew towards offices owing to the GIC-Brookfield deal, Q1 FY25 was significantly aligned towards logistics on account of the USD 1.5 Bn investment in warehousing assets of Reliance Retail by ADIA & KKR.
