NCR commercial real estate emerged as the top PE favourite as it saw investments to the tune of $992 million in the first half of FY23.- The demand in the residential sector has remained healthy at $372 million in H1FY23, says an
Anarock report. - Need another bullet The share of investments by foreign investors continued at around 78% in H1FY23.
In the first half of FY23, private equity investments in the space stood at 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 being preferred by private equity investors. The investment share of commercial assets in the overall real estate pie has increased from 18% in H1 FY22 to 67% in H1 FY23,” Shobhit Agarwal, MD & CEO, Anarock Capital said.
NCR beats the financial capital of India
Most of these investments flowed into NCR which saw a 61% rise – in H1 FY23, the investments stood at $992 million — that’s almost half of all private equity investments in commercial real estate.
Chennai is the next private equity favourite with investments worth $257 million followed by
Residential real estate demand remains strong post pandemic
Demand in the residential sector has remained healthy at $372 million in H1 FY23, resulting in it being second most preferred among all asset classes.
“Post-pandemic demand and confidence in the commercial real estate sector has seen a meaningful recovery,” Agarwal said.
“Investor confidence in Indian real estate is increasing steadily on the back of improvement in the Indian economy despite global headwinds, and the continued robustness of its real estate industry,” Anarock said.
Domestic investments increased by 45% and foreign investments increased by 36% of the total capital inflows in Indian real estate in H1FY23 as compared to H1FY22.
The share of investments by foreign investors continued at around 78% in H1 FY23, reflecting the continued global confidence in India’s real estate industry, revealed Anarock.
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Private equity (PE) investment in real estate increased 40 per cent during the April-September period of this fiscal to USD 2.8 billion, with a huge inflow coming from foreign funds especially in office assets, says a report. According to the Anarock report, PE investment stood at USD 2 billion in the corresponding period of the last financial year.
“Investor confidence in Indian real estate is increasing steadily as a reflection of improvement in the Indian economy and state of real estate industry,” said Shobhit Agarwal, MD & CEO of Anarock Capital, which is part of real estate consultant Anarock.
As per the report, investments by foreign investors contributed around 78 per cent to the total inflow in the first half of this fiscal, reflecting their strong confidence in Indian real estate.
Domestic investments increased by 45 per cent while foreign investments rose by 36 per cent of the total capital inflows in April-September of 2022-23, compared to the year-ago period.
Top 10 deals accounted for 86 per cent of the total value of PE investments in the first six months of this fiscal, as compared to 80 per cent in the first half of FY’22.
Among various asset classes of the real estate sector, Agarwal said the demand in the office market has seen a “meaningful recovery”.
The PE investments in office assets stood at USD 1,862 million during April-September of this fiscal — almost equivalent to the investment in the whole last financial year.
Office market was adversely hit during the 2020 and 2021 calendar years, because of the COVID-19 pandemic and lockdowns. Adoption of work from home reduced office space demand.
The consultant said that housing demand has also remained healthy in post-pandemic times, resulting in the residential asset class being second-most preferred among all asset classes with USD 372 million being funnelled into it in H1 of FY23.
Across geographies, Anarock noted that PE investments came more in Delhi-NCR.
“NCR witnessed a strong increase in capital inflows in PE — from USD 181 million in H1 (April-September) of FY’22 and USD 590 million in H2 (October-March) FY’22, to USD 942 million in H1 of FY’23,” Anarock said, adding that the inflows were driven by joint venture platform deals like Brookfield with Bharti Enterprises and Bain Capital with Tarc.
Commenting on the trend, realtors’ body NAREDCO President Rajan Bandelkar said the Indian real estate sector has so far very well navigated itself amid the pandemic and the current global economic concerns.
“The rise in private equity investments is both evidence and strong indication for the sector’s growth prospects and investor community’s confidence in it,” he added.
Lifting of the COVID restrictions, improvement in market sentiments and resumption of economic activities have been major factors for the rise in investments, Bandelkar listed out.
Pradeep Aggarwal, Founder and Chairman of realty firm Signature Global, said the real estate sector as a whole, be it residential or commercial, has performed significantly well since last one year.
“Domestic as well as global investors are chasing for opportunities to deploy funds in the Indian real estate market. We expect the trend to continue,” said Aggarwal, whose company is into development of affordable homes.
Anarock Capital’s report highlighted that out of USD 2.8 billion inflow in April-September 2022 by PE firms, nearly USD 2.2 billion was in the form of pure equity and the rest structured debt.
The consultant noted that investments in office, residential and industrial & logistics assets will continue.
In yet another signal toward a recovering real estate market, realty consultancy firm Anarock has said the January-March 2022 quarter witnessed the highest supply of residential units in the past six years. They stood at 89,140 units in January-March 2022, compared with 73,760 in the previous quarter.
The report said the sales during January-March 2022 were also the highest since 2015. They stood at 99,550 in the first quarter of the current calendar year, against 90,870 in October-December 2021. The share of the Mumbai Metropolitan Region (MMR) and Hyderabad in new launches increased to 51 per cent in the first quarter of the current calendar year, from 46 per cent a quarter ago.
As COVID-19 receded, developers are on a launch spree. Sales are likely to increase in the coming quarter on the back of a rise in new launches. Prices of raw materials have increased significantly in the past one year which may lead to an increase in property prices in future. Geopolitical tensions between Russia and Ukraine may also fuel a further increase. Amidst a rise in input costs and declining income of affordable segment’s homebuyers, developers may go slow on these launches, according to the report by Anarock.
It added, “The RBI is expected to increase repo rate in next couple of months as inflation is at the higher side. Developers need to be cautious with high unsold inventory. Project execution is critical to ensure cash inflow. Demand for larger homes to remain robust amidst the work-from-home and hybrid work policies. Peripheral areas continue to gain traction to contain the cost.”
In the commercial space also, new completion saw a significant increase from 9.3 million square feet in the December 2021 quarter to 19.7 million square feet in the March 2022 quarter.
“With pandemic receding and business resuming, new office completions and absorption may increase significantly in 2022. Pandemic-induced lockdown has led to an increase in offices in the tier II and III cities. This growth is likely to continue in the years to come as companies look to decentralise operations. REITs in India have given good returns and provided exit to the investors. Amidst this backdrop, investments in commercial office assets are likely to increase in the future periods,” Anarock said.
It added that the focus on environmental, social and governance (ESG) to increase with occupiers and investors making informed long-term business decisions. New office developments will be designed to support tech-enabled administration and other functions. The IT-ITeS sector may continue to dominate the leasing activity in 2022.
On the retail segment, it said, “With no restrictions on business, new mall completions and absorption may increase significantly in 2022. With the rise of e-commerce, many retailers will consider having micro fulfillment centres to increase efficiency and reduce delivery timelines. Omni-channel adoption will be the key to attracting and retaining customers by providing an immersive shopping experience.”
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Construction work of nearly 4.8 lakh homes worth Rs 4.48 lakh crore are currently stuck or significantly delayed across seven major cities, although builders have completed 37,000 such units so far this year, according to property consultant Anarock.
For its research, Anarock has taken only those housing projects that were launched in 2014 or before across seven cities — Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Hyderabad and Pune.
As per the data, 36,830 languishing homes were completed in these cities between January 2022 and May 2022.
At the end of May 2022, Anarock said that 4,79,940 units worth Rs 4,48,129 crore were stuck in various construction stages across these seven cities.
The property markets of these seven cities were saddled with about 5.17 lakh units worth Rs 4.84 lakh crore at the end of 2021 calendar year.
”Developers remain committed to completing their projects and are capitalizing on the ongoing demand for ready-to-move homes,” said Prashant Thakur, Senior Director & Head – Research, Anarock.
”What is notable is that they are maintaining momentum despite considerable headwinds from increased input costs, which have gone through the roof in the last five months. The fact that housing demand has remained strong in last two years obviously helps,” he said.
Several large developers as well as the SWAMIH fund and state-owned NBCC have taken over stuck/delayed inventories and are completing pending construction works, Thakur said.
Anarock said that the Delhi-NCR and MMR together account for 77 per cent of the total stuck/delayed housing units, while the southern metros Bengaluru, Chennai, and Hyderabad have just 9 per cent.
Pune has about 9 per cent share, while Kolkata accounts for 5 per cent.
Among cities, Delhi-NCR saw the maximum completion of 16,750 units during January-May, 2022. Currently, the NCR region has 2,40,610 stuck/delayed units worth Rs 1,81,410 crore.
At the end of December 2021, NCR had 2,57,360 stuck/delayed units worth Rs 1,94,034 crore.
In MMR, 1,28,870 units are stuck/delayed worth Rs 1,84,226 crore. The region had 1,34,170 languishing units worth Rs 1,91,807 crore at the end of the last year.
Around 5,300 units were completed in MMR during January-May this year.
Bengaluru saw completion of 3,960 units during January-May 2022. Currently, the Bengaluru city has 26,030 stuck/delayed units worth Rs 28,072 crore.
At the end of the last year, the IT city had 29,990 stuck/delayed units worth Rs 32,345 crore.
In Hyderabad, 1,710 units were completed during January-May 2022. The city currently has 11,450 stuck/delayed units worth Rs 11,310 crore, while at the end of December 2021, the figure was 13,160 units worth Rs 12,995 crore.
In Chennai, Anarock said that 5,190 units worth Rs 3,731 crore are currently stuck or significantly delayed. At the end of 2022, the city had 8,870 such units.
Chennai currently boasts of the lowest burden of stuck units among the top seven cities, the consultant said.
At the end of May 2022, Pune had 44,250 units worth about Rs 27,533 crore. In 2021-end, the city had 48,100 stuck homes worth Rs 35,220 crore.
As many as 3,850 stuck/delayed units in Pune got completed during January-May this year.
Kolkata saw completion of 1,580 homes during January-May this year. Currently, Kolkata has 23,540 stuck/delayed units worth over Rs 11,847 crore. In 2021-end, there were 25,120 stuck/delayed units worth Rs 12,639 crore.
Homebuyers in Delhi-NCR have been worst affected with several builders including Jaypee Infratech, Unitech, Amrapali, and The 3C Company, defaulting in their promises to deliver their projects.
Anarock, which is one of the leading property consultants in India, achieved a 32 per cent growth in its revenue at Rs 402 crore during the last fiscal year.
Anarock, established by Anuj Puri in April 2017, is majorly into housing brokerage and sells flats on behalf of the developers. It also provides consultancy in other segments of real estate like office, retail, warehousing and data centre.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
Home-grown real estate consultant Anarock has achieved a 32 per cent growth in its revenue at Rs 402 crore during the last fiscal year owing to a sharp recovery in housing demand post second wave of the Covid pandemic, its chairman Anuj Puri said.
Anarock, one of the leading housing brokerage firm in India, was established by Anuj Puri in April 2017. Before setting up his own firm, Puri had served as chairman and country head at a global property consultancy firm for 10 years.
In an interview with PTI, Puri said the company has achieved a strong growth in revenue despite the pandemic.
“Our revenue has grown to Rs 402 crore during the last fiscal from Rs 305 crore in the 2020-21 financial year,” he said.
Puri noted that the company benefited from the consolidation in the real estate sector.
Anarock group, including its arm Trespect and affordable housing division, facilitated sale of 18,800 units worth Rs 19,260 crore on behalf of real estate developers during the 2021-22 fiscal.
“Confidence of users of real estate is rapidly returning. At Anarock, we are benefiting through hard work focusing on our clients, our people, returns to our stakeholders and achieving a common vision of excellence,” Puri observed.
Out of the total revenue posted in the last fiscal, he said the housing brokerage services contributed around Rs 300 crore.
The company also earned revenue by facilitating leasing and outright sale/purchase transactions in office, retail, warehousing and data centre segments. It also facilitated various land deals.
Moreover, Puri said the company’s capital market division performed well and helped real estate companies in raising funds.
Talking about the residential market, he highlighted that the demand recovered sharply after the second wave of the pandemic that hit India during April-May 2021.
Historical low interest rates on home loans coupled with stable housing prices during the last 5-7 years improved the affordability of buying apartments, Puri observed.
Of late, he said, there has been an increase in demand for bigger apartments as people need extra space for work from home and study purposes.
Puri said the Indian real estate over the last two years has been witnessing a huge consolidation of demand towards those developers who have impeccable track record of execution of projects.
He said the demand for office and retail spaces has also improved significantly.
The growth of e-commerce is helping in creating demand for warehouses and data centres.
Anarock, which has its presence across India and the Middle East, uses its proprietary technology platform to accelerate marketing and sales.
Its services include residential broking; retail (in partnership with Vindico); commercial; hospitality (via HVS Anarock); land services; industrial and logistics (in partnership with Binswanger); investment management; research; strategic advisory & valuations; project management services (in partnership with Mace); and society management services (through ApnaComplex).
In April Anarock acquired flexible workspace platform myHQ.
Anarock has a team of around 1,800 real estate professionals having presence across all major Indian cities like Mumbai, Pune, Ahmedabad, Delhi-NCR, Chennai, Bengaluru, Hyderabad, Kolkata and Lucknow. It has offices in the Middle East markets as well.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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Home-grown real estate consultant Anarock has achieved a 32 per cent growth in its revenue at Rs 402 crore during the last fiscal year owing to a sharp recovery in housing demand post second wave of the Covid pandemic, its chairman Anuj Puri said. Anarock, one of the leading housing brokerage firm in India, was established by Anuj Puri in April 2017. Before setting up his own firm, Puri had served as chairman and country head at a global property consultancy firm for 10 years.
In an interview with PTI, Puri said the company has achieved a strong growth in revenue despite the pandemic.
In an interview with PTI, Puri said the company has achieved a strong growth in revenue despite the pandemic.
“Our revenue has grown to Rs 402 crore during the last fiscal from Rs 305 crore in the 2020-21 financial year,” he said.
Puri noted that the company benefited from the consolidation in the real estate sector.
Anarock group, including its arm Trespect and affordable housing division, facilitated sale of 18,800 units worth Rs 19,260 crore on behalf of real estate developers during the 2021-22 fiscal.
“Confidence of users of real estate is rapidly returning. At Anarock, we are benefiting through hard work focusing on our clients, our people, returns to our stakeholders and achieving a common vision of excellence,” Puri observed.
Out of the total revenue posted in the last fiscal, he said the housing brokerage services contributed around Rs 300 crore.
The company also earned revenue by facilitating
outright sale/purchase transactions in office, retail, warehousing and data centre segments. It also facilitated various land deals.
Moreover, Puri said the company’s capital market division performed well and helped real estate companies in raising funds.
Talking about the residential market, he highlighted that the demand recovered sharply after the second wave of the pandemic that hit India during April-May 2021.
Historical low interest rates on home loans coupled with stable housing prices during the last 5-7 years improved the affordability of buying apartments, Puri observed.
Of late, he said, there has been an increase in demand for bigger apartments as people need extra space for work from home and study purposes.
Puri said the Indian real estate over the last two years has been witnessing a huge consolidation of demand towards those developers who have impeccable track record of execution of projects.
He said the demand for office and retail spaces has also improved significantly.
The growth of e-commerce is helping in creating demand for warehouses and data centres.
Anarock, which has its presence across India and the Middle East, uses its proprietary technology platform to accelerate marketing and sales.
Its services include residential broking; retail (in partnership with Vindico); commercial; hospitality (via HVS Anarock); land services; industrial and logistics (in partnership with Binswanger); investment management; research; strategic advisory & valuations; project management services (in partnership with Mace); and society management services (through ApnaComplex).
In April Anarock acquired flexible workspace platform myHQ.
Anarock has a team of around 1,800 real estate professionals having presence across all major Indian cities like Mumbai, Pune, Ahmedabad, Delhi-NCR, Chennai, Bengaluru, Hyderabad, Kolkata and Lucknow. It has offices in the Middle East markets as well.