The real estate sector saw 25 deals valued at $1.4 billion in the September quarter, driven by Qualified Institutional Placement (QIP) activity, private equity funding in residential and commercial segments, and real estate technology companies, a report by Grant Thornton Bharat has said.
“The quarter maintained strong deal volumes with 25 deals, marking an all-time high in terms of deal volumes and the second-highest values since Q2 2023,” according to the report titled Real Estate/ REITs Dealtracker – Providing M&A and PE deal insightโ.
The deal values were primarily driven by the QIP activity, followed by private equity funding in the residential and commercial segments, with additional activity in real estate technology companies, it noted.
It noted that eight deals were sealed for $51 million in the merger and acquisition (M&A) category. โM&A deal volumes reached an all-time high with 8 deals, up 14% from Q2 2024. Deal value declines 58% to $51 million, due to smaller ticket deals. The average deal size dropped from $17 million to $6 million,โ it said.
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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 deal activity in both M&A and PE spaces, it said.
The top M&A deal included the Macrotech Developers Ltd’s acquisition of Palava Induslogic 4 Pvt Ltd for $17 million, it said.
Q3 2024 saw three inbound deals in the property development space and two outbound deals in the student housing and online rental platform sectors.
In the PE/VC (private equity/venture capital) category, there were 12 deals totalling $401 million, the report said.
โDeal volumes remained consistent with Q2 2024, indicating sustained interest in the sector. However, deal values declined 72% from $1.4 billion in Q2 2024. The top two deals accounted for $346 million, highlighting a concentration of value in fewer transactions,โ it noted.
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The top PE deal was Keppel’s $265 million investment in One Paramount, a freehold Grade A office complex in Chennai, it said.
“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,” said Shabala Shinde, Partner, Grant Thornton Bharat.
Private equity funding sees a sharp decline in deal values
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, it said.
The quarter witnessed a significant surge in QIPs, with four deals totaling $940 million. During the third quarter, there was one IPO (initial public offering) of $49 million and four QIPs at $940 million, it said.
The September quarter (Q3) witnessed increased capital market activity. This represents a nearly six-fold increase in QIP values compared to Q2 2024, it noted.
Prestige Estates’ $602 million QIP was the standout transaction, driving the quarterly growth, it said.
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โThe robust QIP activity demonstrates growing confidence in real estate firms’ ability to access public markets,โ it noted.
