Number of private equity deals in realty dropped in FY25, but value is up

Bengaluru: Despite a decline in the number of private equity (PE) deals in Indian real estate to 24 during April to December 2024 (or the first nine months of the current financial year, 9M FY25) as compared to 30 in the same period of FY24, the total investment value rose 6 per cent year-on-year (YoY) to $2.82 billion, according to a report by Anarock out on Monday.

This investment value growth was significantly influenced by the high-profile Reliance-ADIA/KKR warehousing deal worth $1.54 billion, which skewed the overall financial metrics.

The top 10 deals accounted for 93 per cent of the total transactions for the nine months ended December 31, 2024. The average deal size also saw an increase of 32.5 per cent, climbing from $88.5 million in 9M FY24 to $117.3 million in 9M FY25.

“This deal (the Reliance-ADIA/KKR one), along with the $204 million Blackstone-LOGOS equity deal, significantly boosted the logistics and warehousing sector, which captured 62 per cent of total investment,” said Shobhit Agarwal, MD and CEO, ANAROCK Capital. This surpassed both the office and residential sectors, which attracted 14 per cent and 15 per cent, respectively.

Given the hybrid nature of the outsized Reliance-ADIA/KKR deal, hybrid transactions accounted for 55 per cent of the total transactions in the period. Debt accounted for 24 per cent, and equity accounted for the remaining 21 per cent in this period.

Multi-city deals dominated the transaction table in 9M FY25, led by the Reliance-ADIA/KKR transaction, which, along with two other multi-city deals, pushed the tally to over 62 per cent.

In terms of cities, Bengaluru and Hyderabad led the transaction tables with 11 per cent and 10 per cent deal shares, respectively.

However, pure debt and equity transactions remained relatively scarce with the hybrid Reliance-ADIA/KKR deal remaining the dominant one in the period.

Domestic and foreign investors broadly maintained the same funding proportions as the previous year(s), with foreign players driving funding at 82 per cent.