The Indian real estate sector has experienced a remarkable surge in deal-making activity during the second quarter of 2024, with transactions totalling USD 1.56 billion, marking a substantial increase from USD 200 million in the preceding quarter, according to Grant Thornton Bharat’s Real Estate/REITs Dealtracker.
The report highlights that the second quarter witnessed a total of 19 deals, driven predominantly by four high-value transactions. This surge underscores a robust recovery in the market, bolstered by renewed investor confidence and supportive government policies, which have collectively created a conducive environment for significant deal flows. A spokesperson from Grant Thornton Bharat noted that the USD 1.56 billion in deals reflects a broad-based growth trajectory, particularly evident in the substantial rise of domestic transactions and private equity (PE) investments. The report details that mergers and acquisitions (M&A) in the real estate sector amounted to USD 123 million, a notable increase from USD 32 million in the previous quarter.
PE investments, a major driver of the surge, skyrocketed to USD 1,439 million in Q2 2024 from USD 168 million in the first quarter, highlighting an 8.5-fold increase. Notably, four significant PE deals alone contributed 85% to the total deal value, with Brookfield India Real Estate Trust’s acquisition of grade A commercial assets in Delhi for USD 723 million emerging as the largest transaction of the quarter. In the residential development segment, key investments included Abu Dhabi Investment Authority and Kotak Alternative Investment Fund’s USD 240 million infusion into Prestige Estates Projects and Indiabulls Constructions’ USD 78 million acquisition of Sky Forest Projects from Blackstone.
Knight Frank India’s supplementary report on PE investment trends further underscores the sector’s vitality, revealing a total PE investment of USD 3 billion in H1 2024, a 15% year-on-year increase from USD 2.6 billion in H1 2023. The warehousing sector dominated with 52% of total PE investments, followed by residential (29%) and office spaces (20%), with residential witnessing an impressive 209% surge to USD 854 million in H1 2024 from USD 277 million in H1 2023. Analysts anticipate sustained momentum in the Indian real estate market, driven by continued economic recovery, supportive fiscal measures, and robust investor interest across various segments. The ongoing trend of escalating deal values and increasing transaction volumes signifies a promising outlook for the sector in the latter half of 2024.
