Real Estate Sector Sees Strong Deal Activity with $1.4 Billion in Q3 2024
The third quarter of 2024 saw a robust 25 deals valued at $1.4 billion in the real estate sector, primarily driven by QIP activity and PE funding in residential and commercial segments, according to a report by Grant Thornton Bharat.
Real EstateQipPrivate EquityMaCommercial Real EstateReal EstateOct 14, 2024
The deal values were significantly influenced by QIP activity, with four QIPs totaling $940 million, and private equity funding in the residential and commercial segments. Additionally, there was increased activity in the real estate technology sector. Eight deals were sealed for $51 million in the merger and acquisition (M&A) category, setting an all-time high in deal volumes, though the average deal size dropped from $17 million to $6 million.
Compared to Q2 2024, Q3 saw a 71% decline in overall PE and M&A deal value but a 5% increase in deal volume. Commercial development and real estate technology businesses led the deal activity in both M&A and PE spaces. The top M&A deal included the acquisition of Palava Induslogic 4 Pvt Ltd by Macrotech Developers Ltd for $17 million.
In the PE/VC (private equity/venture capital) category, there were 12 deals totaling $401 million. Although deal volumes remained consistent, indicating sustained interest in the sector, deal values declined by 72% from $1.4 billion in Q2 2024. The top two deals accounted for $346 million, highlighting a concentration of value in fewer transactions. The top PE deal was Keppel's $265 million investment in One Paramount, a freehold Grade A office complex in Chennai.
Q3 2024 also saw three inbound deals in the property development space and two outbound deals in the student housing and online rental platform sectors. The quarter witnessed increased capital market activity, with one IPO (initial public offering) of $49 million and four QIPs totaling $940 million. Prestige Estates' $602 million QIP was the standout transaction, driving the quarterly growth.
According to Shabala Shinde, Partner at Grant Thornton Bharat, 'Q3 2024 has witnessed a healthy recalibration in India's real estate market, with deal volumes remaining stable and commercial real estate driving growth. As investors seek long-term value in energy-efficient and tech-enabled developments, we're confident that the sector will continue to attract attention from institutional investors. The outlook for the coming months is optimistic, with India's real estate sector poised for sustained growth.'
Private equity funding saw a sharp decline in deal values from $1.4 billion in Q2 to $0.4 billion in the September quarter. However, the volume of deals remained consistent, indicating sustained interest in smaller, more targeted investments.
Frequently Asked Questions
What was the total value of deals in the real estate sector during Q3 2024?
The real estate sector in Q3 2024 saw 25 deals valued at $1.4 billion.
What were the primary drivers of these deal values?
The deal values were primarily driven by QIP activity and private equity funding in residential and commercial segments, along with activity in real estate technology companies.
How did M&A deal volumes and values perform in Q3 2024?
M&A deal volumes reached an all-time high with 8 deals, but the deal value declined by 58% to $51 million, due to smaller ticket deals.
What was the top PE deal in Q3 2024?
The top PE deal was Keppel's $265 million investment in One Paramount, a freehold Grade A office complex in Chennai.
What does the outlook for the real estate sector look like according to Grant Thornton Bharat?
Grant Thornton Bharat is optimistic about the real estate sector, expecting continued growth as investors seek long-term value in energy-efficient and tech-enabled developments.
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